Fiber Connect 2019, sponsored by the Fiber Broadband Association, is a great opportunity to meet some of the leaders in Municipal Broadband. In this episode, we speak with Kevin Mitchell, VP, Marketing at Alianza as well as Kristie Goodson, Sr. Dark Fiber Specialist with the Tennessee Valley Authority. Click to listen or read the transcript below.
In this episode, we continue our interviews at the Fiber Connect 2019 event sponsored by the Fiber Broadband Association. We meet VP, Marketing at Alianza as well as Kristie Goodson, Sr. Dark Fiber Specialist with the Tennessee Valley Authority. Click to listen or read the transcript below.
Jeff Fraleigh: We are visiting with Kevin Mitchell, vice president of marketing with Alianza. So tell me how is the show going for you guys so far?
Kevin Mitchell: It's been great. Great conversations with partners, with prospects, current customers coming by, wanting to know what's new how we can help them grow, how they can launch business VOIP services and just be more successful on their markets, so it's great conversations all around. I mean, the partner ecosystem that we've built here in the fiber community, and a bunch of the broadband communities is really showing through here. There's a lot of great partners.
Jeff Fraleigh: In full transparency for the listeners, right, we are a partner with Alianza. What have you seen over the past few shows and events, how are things changing for you, what do you think's happening in the market, anything that you think is interesting?
Kevin Mitchell: The number of new entrants that are launching fiber-based broadband just continues to increase, from all different types of backgrounds and segments, right? You have the municipalities, you have new over-builder ISPs, electric co-ops, you have cable providers starting to overbuild their own DOCSIS plant with fiber, of course you have telcos doing some service to their communities with building out fiber, some better than others. But just the number of providers that are just in the market overall, offering broadband, sometimes super, hyper-local, serving a very set, small community has been increasing. And then everyone that's been offering broadband, whether it's been a WISP or telco, fiber's all in their plans, and increasingly so.
Kevin Mitchell: So that's been very apparent through shows like Fiber Connect and Tech Advantage and Broadband Communities. They attract a diverse set of providers, and there's more consultants too, helping everyone figure out, does this make sense for me? What's the plan look like, what services am I layering on top of broadband, how do I compete against the incumbent, all that type of stuff. So there's a big consultancy that specializes in different areas that's growing, too.
Jeff Fraleigh: What's your sense just in the market in general for broadband?
Kevin Mitchell: We focus on North America, so I can't speak globally for anything that I comment on, but I think given the number of underserved Americans, un-served or underserved, there's still a lot of growth to go, in addition to serving what's already been served with what will be, in a year or two, inadequate broadband speeds, when everyone's going to have a gig or have access to a gig, anyway. And then someone listening to this a few years hence will be laughing that I said access to a gig, right? But I think we're still very early stage. If we look at the electric co-ops, there's something like 900 of them in the US, 100 plus have launched broadband today. Some of it's wireless, most of it's fiber, and the numbers I hear are something like another 200 are in various stages of evaluating or building.
Jeff Fraleigh: One of the things that I've noticed, at virtually any industry event, Alianza is present. You guys have a great track record of that and have begun to really get some market share over the last couple of years. Talk a little bit about that.
Kevin Mitchell: Yeah, I appreciate that, Craig. We are 10 years old this year. Our roots were kind of helping wireless ISPs, brand new service providers, launch voice, add cloud communications into their portfolio. But over the last five years, we've helped all these new upstarts in fiber broadband as well as cable operators, telcos, replace aging, outdated VOIP solutions, whether it was a hosted soft-switch or something they hosted on prem like a soft-switch or an IMS core. So we've had a great success growing both those types of providers that are either brand new to voice or looking to update their solution. So now, we're close to 70 service providers using our solution. Again, range of different service provider types, and sophistication or experience around voice, and we have over 400 thousand subscribers now. And it's our own platform, it's our own intellectual property, we're not using somebody else's software and code. We built it all, we host it in two different locations, and maybe more in the future in the US with a resilient and very easy-to-use solution, so that is resonating with the market.
Craig Corbin: That's great. And where do you think Alianza goes from here? Where do you see, in the next two to four years, sort of just more of the same? More growth?
Kevin Mitchell: Absolutely, more of the same, but also adding to our portfolio, expanding upon our residential phone communication set, expanding feature functionality to go beyond just voice communications for businesses, like chat bots and SMS and messaging. So more unified communications, more ways to use voice instead of just a phone call. More ways to use communication instead of the traditional one-to-one. So there's going to be an expansion of new capabilities that make our customers more successful in the markets so that they grow more, but then we're going to be converting more service providers from outdated solutions onto our cloud, as well as helping all these new upstart entrants enter the market with a bundle. Because yes, phone is 100 years old or more than that as a service, but it continues to be compelling. Every broadband provider that's launching also launches phone. Video sometimes is questionable, or at least the traditional way of offering video and TV, but phone is always there, and they're going to get 20-40% take rates on their subscribers, and the margins are still great, very strong for offering phone service.
Craig Corbin: You talk about margin, the ability with the Alianza solution to experience a substantial margin on the commercial end of things is even better.
Kevin Mitchell: Absolutely, and that's where the take rate's even stronger, when you're talking about business broadband plus phone. And anecdotally, we hear from customers all the time that until they have phone in their portfolio, it's very difficult for them to win over the broadband business, because the business wants that one local provider. And that is what's also compelling about a bunch of these upstarts, is they are in the community, they are the local provider, the people live in those communities that work there, and they have the trucks and the folks in the field helping their neighbors. And they really want to see that also include phone service.
Jeff Fraleigh: That's great. Is there anything that sort of keeps you up at night, or when you think of the growth for Alianza, anything that you sort of worry about, maybe that's a market dynamic, or anything like that? Anything that you think through?
Kevin Mitchell: No. There was a cord-cutting, fixed phone is dead type of thought maybe 10 years ago or so. Again, I think yes, there's macro-pots, TDM, traditional decline in numbers, and that continues. But even as that happens, the VOIP portions of the market continue to grow, especially servicing businesses. And still, half the market is TDM and traditional phone service when you look at fixed voice, so there's still this tremendous growth opportunity. There's nothing necessarily that keeps us up at night, other than we need to execute on a great plan and hire all the right people, and continue to make sure we pay attention to our partners and our customers, and keep up with the latest capabilities, because integration and automation and using APIs is a core part of our business. And there's a lot of change. Our partners are changing their software, the devices are changing. We just need to keep tabs on that and continue to make automation and make voice easy and automate as much as possible.
Jeff Fraleigh: That's great, and I know Craig, we see that all the time as well, right? Things are changing at what feels like light speed. And so I think with that, and listen, I think your business plan is incredible solid, right? Stay up on technology, have great partnerships, provide great service to your customers, I think that's what everyone wants to hear.
Kevin Mitchell: That's why we have our partnership, right? You're powering the back office, you're powering the revenue streams for these service providers, and we want to make it easy instead of swivel-chairing. Once you're entering a broadband subscriber's information, it flows through right from your solution to ours, and customer is activated, the number's ported, 911 is solid and ready to go. So we want to incorporate as much of that functionality as possible, and continue to use those APIs and automate everything that we can. Can't automate everything, but we're going to automate the big processes that can take a lot of people and time.
Pete Pizzutillo: Welcome to Fiber Connect 2019. We have Kristie Goodson from the Tennessee Valley Authority. She's the dark fiber specialist.
Pete Pizzutillo: Yeah, so what did you like about the show this year?
Kristie Goodson: The show this year is good. It's bigger than last year, I notice a ton of first-time attendees, and I was in the women in fiber lunch, and I swear at least half the room, it was their first one. So it's really growing.
Pete Pizzutillo: Since I was excluded from the women in fiber lunch, what did you guys talk about, what was the topic?
Kristie Goodson: We had a lady Jane Schign. She spoke about how women in tech industries, it's growing but there's still not as many men. But overall, she was kind of, you are the ... and this applies to men as well. You're the kind of master of your own career. If you don't promote yourself, someone else won't do that for you. So it was all about that, about how to kind of get along and move up in the world, and don't let anybody tell you know.
Sabrina Porter, ETI: She sort of guided you through the process. She had sort of a coach as well, to get her where she was going, and she just wanted to pay that forward as well.
Kristie Goodson: And she even talked about the fact that your social media presence, no matter what industry you're in now, is a bigger deal than ever. And if you yourself are not comfortable with doing your own social media presence, find you someone who's a millennial, that's they've grown up with social media since they could handle a phone, and help them get you to grow your presence, grow your brand, because you are your own brand. And so she talked about what she called reverse mentors, which is basically she helps her, but then she also helps her in reverse with her social media. And now I think she's got ... she went from a thousand followers, and now she's at 60 thousand. It's a lot.
Pete Pizzutillo: Are you active on social media?
Kristie Goodson: On LinkedIn, Facebook, and Twitter, but to tweet is ... I'm having to get past that, because I'm like, why does anybody want to know what goes in my head every 20 minutes or something?
Pete Pizzutillo: Well you have a lot of experience as the dark fiber specialist, you have a certain expertise, right? Can you explain what it is that you're doing for TVA?
Kristie Goodson: At TVA we have, because we're a government entity, and throughout the years as it's become available, we have sold surplus fiber to various companies, and mostly our power companies, our local power companies. And so, my job is really, I help our local power companies. Because TVA's part of the federal government. We're fully self-funded, but we're part of the government, and we have 154 local power companies that we sell power to. And most of my job is helping our local power companies in the fiber space, which most of the time doesn't have anything to do with broadband, but it's about how fiber enables the power space. The secure communications that we have to have and the metering, and how we can just have better control of our own data, and so a lot of my time is spent doing that. Just working, because we have them from, they have no fiber and no anything, to they've got it and they're ruling the world.
Pete Pizzutillo: I think there's a lot of misconceptions about what's fiber used for. Other than that, does the consumer understand what dark fiber is? Does it matter to the consumer?
Kristie Goodson: The consumer thinks fiber means immediate broadband, and fiber is not that. That's usually what, a lot of times when I've talked to people about what I do and I say I'm a fiber specialist, they're like, "Oh, so you get internet to my house," and I'm like, "No." No, that's not different than saying that because the interstate goes through your town, that you're automatically in Atlanta. It just doesn't happen. Dark fiber is simply the lanes on an interstate, and this applies whether it's TVA or anybody selling dark fiber. It's like the lanes on an interstate, and somebody has an extra lane or two, and they sell it to somebody, and that person can put their cars on it and drive their own cars, and nobody gets in their lane. But the lanes are just there until somebody puts equipment up on it. And that in turn creates the communication path, the broadband, the agriculture that we're using it for today, the research platforms the universities use it for. I mean, it's so functional to what we do every day, and then dark just means it's there and nobody's using it, so can we find a use for it somewhere else. And so I've done that for 23 years now. Three with TVA, 20 with Carrier.
Pete Pizzutillo: And what's the scale around TVA? You said you have many utilities. How many utilities, and how many are using fiber, and how many are thinking about it?
Kristie Goodson: I don't know the number of utilities we have that have fiber; I don't have that in my head right now. But we have 154 local power companies. The majority of those, because we're the public power model. We have parts of Mississippi, parts of Alabama, a little bit of Georgia, Kentucky, and all of Tennessee. And there are various co-ops and municipals within the Tennessee Valley Authority. We're the generation and transmission, we sell the power to them. We also do a lot of economic development. Lots of jobs in industries, we partner with our local power companies to bring them into the valley to bring jobs, retain jobs, grow the economy in the valley, and then we also have an environmental arm. We manage the waterways and the natural resources in Tennessee Valley.
Pete Pizzutillo: What's driving is driving these 154 utilities to consider fiber, is it just an evolutionary step?
Kristie Goodson: There's 154 of them, they're anywhere from, we don't have fiber, we don't need it, to, I need to understand fiber because I know I need to put SCADA or AMI, because those are two of the main fiber-fed technologies they have for the power industry. And then you've got some who are ... like EPB is one of our ... Electric Power Board of Chattanooga's one of our LPCs. They were the first gig city in America. Our fiber does not enable that, but they built their own. I think Katie said they have like nine thousand miles of fiber in the city of Chattanooga now. I mean, the jobs and everything that it enables in that territory, and so much of what we have is rural. That's why so many more of our LPCs are getting interested in the idea of bringing fiber, IE broadband, into their area, because they're underserved, and that's why a lot of them are talking about it. It's in the news, and three of our states have recently changed their laws to allow them to get it.
Pete Pizzutillo: So, there are regulatory blocking issues?
Kristie Goodson: The laws in certain states wouldn't allow co-ops especially. Some would allow municipals, some would not, but co-ops especially were not allowed to get into the broadband business. Those three states have recently ... and they all have a little bit of different flavor in their laws, but most of them have changed the laws, so that's why a lot of the local power companies are looking at getting into that. And it's happening across the country, it's not just us, because there's not enough broadband out there in these rural areas, because other companies just ... they've not found it profitable in the models they've used, so across the country power companies and other kind of grassroots efforts are trying to find a way to make that pay.
Pete Pizzutillo: We heard that from the USDA talking about the farm bill. Will that stimulus help these folks?
Kristie Goodson: I think so, if they want to apply for it. But the biggest thing, the reason that it's in the farm bill is because one, it's rural, and two, agriculture is so bandwidth-driven now. I have a friend that, she and her husband are cotton and chicken farmers, and they do so much with ... they do drones, and they have computer-aided farming, and all this stuff, and if they don't get the bandwidth, they can't cheapen how they deliver their crops so that they can make more money in a competitive market. But I loved the guy this morning who said ... one of the guys in one of the panels, he was like, "Do you know how many times farmers call me and go, 'When am I getting the fiber?'" He was like, "You get tired of telling them no."
Pete Pizzutillo: Yeah, right. It's interesting that the farming innovation outpaces the infrastructure they need to keep innovating. That's interesting. What's next for dark fiber in your mind, what do you see?
Kristie Goodson: Dark fiber as a whole, you're going to see more and more fiber period being deployed. Everybody's like, "Oh, well wireless will overtake fiber." No, it's not possible. The physics simply don't fit around that. So you can't do what you can do on fiber with wireless, it's just not possible. So there's going to be more fiber built, especially in cities, because with the advent of 5G and small cells, you're going to have repeaters every city block, and those are all fed with either one to two fibers a piece. Well, think about if you get along a two-mile stretch of road. I mean, that's hundreds of fibers that you've got to have in the ground to supply this, because somebody wants a gig of throughput to their cellphone in three years. So I think it's going to be, especially in the cities it'll be more, but it's going to have to continue to be cross-country as well. Because you can build all the fiber you want in a city, and if there's not somebody to take you to one of the internet hubs, it's like a road to nowhere.
Kristie Goodson: And so you're going to see a lot of people really start building more fiber. I mean, think the show this year is twice what it was before as far as the number of vendors, or close to it. I mean, that alone speaks that in a year, you can almost double about how many people are really interested in this space.
Pete Pizzutillo: Yeah, and there's an international influx too. We're seeing the same in Africa, in Europe, in US, I think globally everybody's rushing to kind of meet this demand.
Kristie Goodson: Yeah, because it's going to grow. If you look at ... my favorite, because I'm a geek and I like data and stuff like that, and if you look at the Cisco network index that they do every couple of years, and I think it's next year ... maybe either later this year or next year, their data showed that people with electricity would be outpaced by people who have cellphones, and people with running water in their homes are now outpaced with people who have cellphones.
Pete Pizzutillo: That's crazy. So more phones than bathrooms.
Kristie Goodson: Exactly. I mean, there are people who have a cellphone who don't have electricity or running water in their house. But they get little solar packs, and they plug them up, or they go into the internet cafes during the day, plug all their stuff up, do all their work, and go home at night.
Pete Pizzutillo: Yeah, even in New York City, they have these kiosks now for even people that are homeless or whatever, they're charging their phones. It's pretty interesting. Thank you, Kristie. Appreciate it, dark fiber lord, and thanks for your insight. Enjoy the rest of the show.
Kristie Goodson: Thanks.
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