The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch.
Hello and welcome to another episode of The Broadband Bunch. Today we speak with David Corrado. He is the CEO of Medina County Fiber Network in Medina, Ohio. He explains the history of Medina’s since 2012, he helps us understand a little bit about their new partnership with Lit Communities and we spend time talking about the COVID crisis and the impact on his community, and how he sees it impacting the future of broadband in municipalities and open networks. David has some very interesting feedback in terms of the economic development impact that he’s been able to bring to Medina County. Hope you enjoy the episode.
Pete Pizzutillo:
We are catching up right in the middle of this COVID crisis, and we’ll talk a little bit about how that’s impacting your community. I think it would be helpful if you would give us a little bit of background. I know you have been serving your county since 2012, and maybe give us an idea of the evolution of your efforts between 2012 and today.
Medina County Fiber Broadband – History of an Open Access Network
David Corrado:
It’s always a good place to start, as they say, at the beginning. Medina County Fiber Network was designed from an economic development perspective. They found 15, 20 years ago, companies as they were growing, did not have the telecommunications infrastructure that was needed in order to keep their company in Medina County. So the fiber railroad, as we call it, was laid, which means that we basically provide the transport for 13 carriers today that are connected into our network, and we sell their internet voice products, data center services, et cetera. So we do not private label and resell wholesale type internet. We are actually bringing you directly, the carriers, into the area from where they were previously located, and then giving them a better railroad track, in order to run their trains on. It is an open network, in all the true sense. And we’ll probably talk a little bit later on certain topics you can see the effect that it’s had on the county.
Pete Pizzutillo:
What was the decision back then to go to an open network? I know there’s a lot of folks that are kind of dealing with that decision right now, instead of being a retail competitor in the space.
Open Access Networks – Partnering Not Competing for Better Telecommunications Choices
David Corrado:
Medina County did not want to be a competitor against the other carriers in the area. The government itself is not an expert in networks, but they are an expert in planning infrastructure, whether it’s water, sewer, power, et cetera. So the County basically called on its core benefits and abilities and said, “You know, we really need to leave the telecommunications area to those that are the experts.” And we didn’t want to create the type of environment where we’re competing. We wanted to entice those carriers to bring more services and more choices into the county. We want our companies to have a choice when it comes to telecommunications.
Pete Pizzutillo:
That’s an interesting approach, the partnering rather than competing approach. And I’ve seen recently that you have also partnered with Lit Communities. Maybe you can help us understand the model that you’re trying to develop with Lit?
David Corrado:
We initially started working with larger enterprises, then we started picking up some mid-size or mid-tier companies. But one big area that we were missing was the small business and residential. And I think in my seven years in this job, I’ve never gone into a commercial company where somebody hasn’t sent it to me, “When are you coming my house?” So about four years ago, we embarked on a very specific mission, and that was to find a public partner that could bring financing into Medina County, and also embrace the open architecture approach. We wanted to keep small business and residential designed and operating in the same manner that we do today. What do they say, “you have to kiss a lot of frogs until you find a prince or princess”? We went all over the world, actually, and met a lot of frogs, but we finally found a great partner in Lit Communities that has the same vision that we do. And they will be building the residential infrastructure off of our commercial backbone, that will serve not only the residents, but also they’ll have a solution that is price competitive for the small businesses.
Pete Pizzutillo:
Open systems had been around for a long time, in vogue and out of vogue, over the past couple of decades. Do you see any trends in that direction? Do you see more communities moving in this direction, or different regions at all? Do you have any perspective on that?
Municipal Fiber Broadband Open Access Networks – No Need to Overbuild
David Corrado:
When I started there, we were the 50th municipal network, going back to 2014. And Next Century Cities, a consortium group out of Washington DC that is a big supporter of municipal networks, we were number 50 on their list. Today there are over 250. Not all of them are open networks. I think open networks are still the minority, but I personally see that move to being able to work with other carriers rather than trying to compete with them. You know, one big challenge we have in telecommunications is overbuilding. We’ve opened up our network to cable companies, anybody who wants to connect, there’s no reason to have eight carriers on the pole. It’s really ridiculous, and a lot of times we see that because companies are trying to build out their fibers so they can be sold to someone else.
David Corrado:
The municipal network shows companies that are coming into your area, or considering it, that the county or the city has a stake in the game. That they’re there to stay, and they’re there to support the company that you’re bringing, the jobs you’re creating. I think that’s the big key, and as we see more manufacturing come back from outside of the United States, cities and counties are vying for those companies to locate in their areas. We’ve had about $650 million in economic development in the last three years in Medina County, and 65% of that was all done by companies that use Medina County Fiber. And most recently, some of the companies from Europe that are looking at Medina County for bringing their companies. I would say the top questions are: do you have a municipal network? And how many carriers can you offer?
Pete Pizzutillo:
You made a comment there about in our previous conversation about a race to the bottom, in terms of overbuilding. While it creates options, it also creates competition and price reduction. So what is it in Medina’s DNA that you think has led you in this direction, and how can other people learn from that, in terms of building open, and potentially, I think given the current crisis that we’re in, more money flooding in this direction, the rush to build versus the rush to build sustainable systems. What is it that you see and hope that other communities learn from?
Medina County Fiber Broadband – Start-up Advice to Other Munis
David Corrado:
I think with any technology, we only see the evolution of a product or a service where it’s more expensive when it first comes out. We find economies of scale, new processes that help bring that price down. The nice thing about the open network is that that race to the bottom doesn’t have to basically be a whole other carrier investing money and building out the infrastructure. We see the prices changing with the competition between the carriers that are our network, and in accordance we also have lowered our prices over the past seven years on the transport side.
David Corrado:
If a government or a muni is looking to get into this particular industry, there are a couple things they should check. Of course one is always the demand aggregation. We ran very large a project where we had websites set up with surveys, we talked with mayors, we had meetings within the particular geographic areas that we were looking at to begin, and we tried to understand what the demand was. And the demand is not just for the triple play in the residential, it’s also for the telemedicine, the smart homes. Even we’re working with a company that provides security systems for residential. We are trying to layer on top and basically leverage this infrastructure.
But the municipal networks have to be careful. The second piece is to look at the carriers in the area, and talk with them, and see if they’re interested in utilizing the network that you’re looking at building. Obviously there are some carriers where their strategic direction is to own the network themselves, and they won’t work with anyone else. They have to run everything from transport through application. But there are, we found quite a few that are saying, “This is a great idea. It’s no financial risk to us, because we’re running on your fiber. We don’t have to build anything, and you’re selling our product.” So that’s the second point.
And then the third point of course, is to understand your cost before you get into this. And I mean detailed costs, looking at what it costs to go and connect to a pole, your underground costs, permitting, do you need to cross railroads. Take all of that, and put it into a nice financial pro forma, and run through that. And then come up with, well, we’re looking for a seven year payback or a 10 year payback. I even know one muni that basically said we can absorb this in our general fund so we’re not looking for any payback on it. We’re just going to build this as part of doing business in our area. So everybody has different models, and you need to define your model, and then make sure that your pro formas match your model.
Pete Pizzutillo:
Getting to our current COVID crisis, right, I could see the levers around the model shifting a bit, right? As distance learning becomes more critical, or tele-health. Can you speak a little bit about what’s the thinking in your county in terms of how those maybe more advanced broadband services are shifting the value costs conversation?
Offering Communities Advanced and Sustainable Services on Municipal Fiber Broadband Networks
David Corrado:
We definitely, in this particular pandemic, have seen on the commercial side increases in being able to be a telecommuter, and increases in internet, obviously. The ability too, for those at home, as we talked about, the new norm where there will be more classes online, a lot of us are doing video conferencing with our customers. I believe the people in Medina County are finally seeing firsthand how the network has really played a major role in being able to support that county in these times. Now of course, we were just starting our construction, actually it was supposed to begin April 1st, it’s going to be delayed a little bit, just because obviously travel restrictions, et cetera, getting all the crews together, but I’m confident we’ll pick up with some additional crews and get right back on schedule.
I wish we had more of the residential in place, but we do have the feedback from the residents on their current systems, and the problems they’re having. if they’re trying to have a video conference, then they can’t get a television program to work, and they get the circle of infinity just spinning. You add telemedicine to that, especially in aging populations, and you need a true dedicated fiber circuit.
And I want to be clear about the word ‘dedicated.’ There are companies that string fiber from the road to your house and back into their network, but they run that fiber like it’s a cable connection. It’s a shared media. All it’s doing is providing a higher bandwidth, but you put more people on that, and since it’s shared, you’re going to find out that you’re going to be right back to where you were before. So just because it’s fiber doesn’t mean it’s properly designed and installed. On our residential network, we will have a fiber from each home actually go all the way into the backbone equipment. So each connection will be a dedicated connection for that house. And that’s what you need if you’re going to be running telemedicine, and you need a large upload speed in order to support those types of applications.
Pete Pizzutillo:
Beyond the technical aspects as well as the private/public partnerships, building systems and providing new services are great, but adoption is really important. What are you all doing to help folks adopt these capabilities to understand, given you have an aging community or maybe an underserved community? Is there anything that you’d like to talk about there?
Municipal Fiber Broadband Networks – Understand the Needs of Communities
David Corrado:
The ‘If you build it, they will come’ is not a great model. You definitely need to understand the needs of your communities. So a few years ago, we started a, if you will, a dog and pony show where we’d go out to trustee meetings, council meetings, economic development conferences. Then we also had town hall meetings, where we would have invites for people to come by. One of our carriers, once we start construction, also has a truck that they drive around the neighborhoods. But we had to listen to the people. We set up a website for them to add notes on the applications that we were going to be providing, had them rank those applications, what’s important, what isn’t, et cetera. There has to be a need for it.
And that’s where if we look back at, and I’m dating myself here, but back at the Y2K period, when we came into this century, we were doing the same thing, going gangbusters, putting up networks, et cetera, and all that stuff just sat there, because it was just a bunch of overbuilding for the same old stuff, phone and internet and even some of it wasn’t even phone.
People get to a point where, “Well, saving $10 a month, that’s not worth that I have to go and get somebody else to punch a hole in my house and run a new cable, et cetera, et cetera.” There has to be a driving force. There has to be more that your constituents really need, in order to make them change. And that’s what we found out by doing the face to face and running the surveys, et cetera, to understand the adoption that’s needed from the services. Even before construction, we already have 50% of the people in our first target area, the residents, saying that they will switch to the fiber network on the residential side.
Pete Pizzutillo:
It’s user centered thinking. And I think that escapes a lot of folks, is there’s a lot of public, private, startup motion in this marketplace. But I think one of the positives coming out of this crisis is, it’s shining a spotlight not only from a federal perspective in terms of funding, but also personally. Everybody is understanding that there’s probably going to be some element of distance learning moving forward, for some significant period of time. Even working from home… I’ve worked from home for 10 years, and it’s always had this kind of stigma of people doing their laundry or not being productive, but now I think what you’ll end up seeing is kind of a shifting in that thinking in terms of it being a significant part of people’s work, if possible. Maybe now you have this top down and bottom up thirst for that type of information. And I think communities need to be prepared to collect and synthesize that information, and make systems that are sustainable and actually usable.
David Corrado:
It’s definitely going to be more a part of our life. I mean the cell phone has already showed us that. So the ability to work remotely with the cell phone has greatly increased our ability as a transit community. The same will happen from the house. I like to look at it like as a cottage industry, back in the days the Renaissance fairs and the Kings and Queens, they would drop a piece of product off at one cottage, and they would move it so far along, and then they would take it to the next cottage. It was sort of like an assembly line with discrete units, each one being a house or a cottage. We’re doing that today, except electronically. When we do desktop sharing and we’re working on project plans or building up documents, we’re all collaborating from our cottages, adding to the value of the product. And then that final product gets sent out. So it’s sort of like an electronic cottage industry.
Pete Pizzutillo:
That leads me to my next question, and I know there’s a lot going on both globally and then you’re just in the early stages of the build about with Lit, but if you had to look down the road three to five years, what do you hope Medina looks like?
Municipal Fiber Broadband and Medina County Moving Forward
David Corrado:
Well, the county I believe at this point is going to take a huge transformation. It’s not only going to have that ability to provide good service at the residential level for the triple play, but it will have the applications we talked about, in addition to the telemedicine and the smart homes. We’ve already been talking with companies for smart sensors for waste removal, and sensors in our water treatment plants. Those types of things, where the community will be intertwined through these electronic capabilities. We hopefully will have a fantastic partnership with Lit Communities, both on a commercial and residential side, and as they bring in more carriers for the residential, we hope to also add those to our commercial, to increase what we can offer the companies here. And of course, the big piece that we initially went after is we’d like to see more economic development or creating jobs in the county. Today, 65% of Medina County residents work outside the County. So we’re very interested in bringing those businesses that can bring jobs, where people can work in county in order to keep sort of that self-sustaining economic cycle working in Medina County.
Pete Pizzutillo:
How can folks listening get access to that information and connect with you? Because I think as a valuable resource, I know you go to some of the events, and since all these events have been kind of shut down for some period of time, how can people learn more about what you’ve been able to do, or reach out to you and any other resources that you’ve may have for them?
Learn More About Medina County Fiber and Municipal Broadband Networks
David Corrado:
Our website is www.medinacountyfibernetwork.com I apologize for the long domain name, it is a one stop shop. Right on the splash page there are icons, if you want to learn more about the residential, if you’re in the county and want to register your address, you can go from there. We have the economic development statistics there, and there’s also a place where you can put in your name, email address, phone, et cetera, where it will send a lead inquiry to me, and that way we can start connecting with you. They can also give me a call if they want, at (216) 832-7059. I’m more than happy to talk with anybody about any of these telecommunications. And we do have quite a few conversations with other cities and counties asking us what we did and learning about our processes, et cetera. So we’re always willing to help.
Pete Pizzutillo:
We’ve been visiting with David Corrado of the Medina County Fiber Network. He’s given us a great view of not only the history, but also how they plan to move forward and given these a very tense and troubling times, David, I really appreciate taking the time to speak with us. And I hope our listeners take you up on your invitation to reach out, to connect, and to see the great work that you guys have done, both from building a technical community, but also a sustainable one that’s adding some real business value to your businesses and your citizens.
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