PODCAST: The Tipping Point of Muni Broadband - ETI

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October 22, 2019

PODCAST: The Tipping Point of Muni Broadband

About Heather Gold

Heather Gold: In 1984, I saw the difference that competition and choices made to residential and small business customers. Years later, as I had walked through many companies, but primarily those building fiber optics, I became the President and CEO of the Fiber Broadband Association. It was so clear to me, after that experience, that the availability of high capacity broadband, most efficiently delivered over fiber optic lines, was the best way to deliver access to the global economy, education, and healthcare for every citizen.  Yet not all citizens, usually due to geography or income, were getting the access they needed, the high capacity broadband. I saw that many communities lack that fundamental education on why broadband was important and essential. That’s my mission today, to speak to communities about why high capacity fiber optics is important and to help communities that don’t know where to go to get information about the differentiators that access makes, to connect them with people that can help them do it.

One of the most profound questions someone asked me once, about this effort, that really impacted me, is “Why should where a child lives, why should the zip code a child lives in determine the access to educational resources?”

Municipal Broadband Today: What do you see today that was different 15 years ago for communities?

Heather Gold: What we’re seeing today is a tipping point; more communities electing to deploy fiber optics, last mile, for their community, for their citizens. We’re starting to see real haves and have nots between communities that deploy it and those that are still without it. And so I think that there’s a real push to link together those areas that haven’t yet received it.

Pete Pizzutillo: There’s almost a bathtub curve of the retiring baby boomers who are smart and have high expectations. They’re moving to rural areas where they don’t have the kind of services that they had access to in more metropolitan areas. Then you’ve got all the gen X, and all those guys in the middle, which are just kind of more tolerant than the baby boomers. But then the millennials, they’ve grown up with just mobile broadband and their expectation, as they buy houses, or they look for working remotely. Those two big groups are not the only ones contributing to that envy, but they are at least a massive group of people that are setting expectations about connectivity.

Heather Gold: As you point out, there is more and more baby boomers that are looking to retire to communities that might offer a less frenetic pace of life. But they still want the access to the kinds of things they had access to in urban areas. And for millennials, high speed broadband is one of the number one requirements in any kind of housing unit. So those two are driving it.

How should municipal leaders think about broadband? 

Heather Gold: I want to say is there’s no one answer for every community, but there are prescriptive steps to take to get to the answer. The first step communities need to do is find a champion, some individual or group that will really lead the community discussion on why they should have broadband. It could be a mayor. It could be the head of economic development. It could be the person who runs schools. Any audience that is impacted directly by the need for high capacity broadband and understands how it will change the life of the citizens in that community.  Once you have a champion, then that champion needs to lead a group that will do several things. The first is to create what is commonly known as, I didn’t invent this, an asset inventory that goes through all of the things that community could bring to the table to spur investment. It could be the town hall could be used for a central office. You could have unused buildings around the community, a complete inventory of all your streets and rights of way. And anytime you open a street, did you put conduit in? Whether there are local police that can allow their buildings to be used for different aspects of deployment of a fiber. And then the final thing they need to do is to figure out where demand will come from. In other words, who isn’t being served, schools, libraries, regional hospitals, all of these entities will want access to high speed broadband. And having them as customers will help offset, and bring services, so that the rest of the community can be served.

Pete Pizzutillo: So find somebody who can become the voice and be the driving force within the community. Start rallying folks to try to get a critical mass of people interested in this. Take a step back and look at a physical asset inventory, both from equipment and buildings to see what kind of infrastructure’s already in place to support this. And then finally, really who’s underserved. And how do you then bring them and create a plan to help bring the underserved within your community at least to a baseline capability of broadband connectivity.

How can Municipalities partner better with utilities and electric co-ops?

Heather Gold: The way you approach that problem depends on whether you’re working with a municipal, publicly owned is the term I like, publicly owned utility, a cooperatively owned utility, or an (IOU) investor owned utility. For the publicly owned utility and the cooperative, it’s a similar approach. You, the citizen, are an owner in that entity and you need to influence whoever’s become the champion to make the case that part of your ownership in that utility, you would like to see used to bring this additional utility service. Which also benefits the electric coop simultaneously because of their ability to put things like smart grid and smart metering on the system simultaneously.

For the investor owned utility, that’s a different, that’s a state by state play. What we’ve seen in Virginia is that our legislature has been working with the investor owned utilities to find ways to incent them to deploy middle mile. And then once they deploy middle mile, then it becomes more economic for a rural community to find a partner to do last mile. And I guess I’d point your listeners to the example of Grayson County, Virginia where AEP, American Electric Power, is going to be building middle mile facilities there. And another company will then do last mile. So like I said, the electric utilities have tremendous assets in place. They have the poles, they have access to the customer base, they know the community. In many instances, they have close billing relationships with the whole community. And they have the boots on the street. So they really have the tools available to them to help make it a more efficient investment, plus their roots in the community. So all those aspects help them, and then help the community in getting deployments faster and more efficiently.

Pete Pizzutillo: I think the community leaders should also reach out to the utilities because the utilities are thinking the other way as well. There’s a bit of a pull and a potential push opportunity as a lot of the utilities have fiber optics in place through AMI or smart grid. They’re thinking of their own future and how do they make their customers happy. So they’re already a little bit further down the learning curve in terms of thinking through this. So the community leaders I think have an informed partner. They just need to start having those conversations a little bit.

Heather Gold: Exactly. How do you take this asset that’s already part of the community, and make it even more widely available, and make the investment even broader?

Municipal Broadband Obstacles

Heather Gold: I think electric utility leaders are risk adverse and the payback on municipal broadband is long. Utility and municipal leaders don’t want to do anything that would undermine the financial vitality or viability of their community. And it costs a lot of money to deploy fiber optics. So you understand they’re reticent on that. But I think that’s why it’s important for them to reach out, and to become aware of all the other communities that have already done it. And that there are plans that have already been thought through so that you don’t have to reinvent the wheel. That you can go to things like UTC, or the Fiber Broadband Association and meet other municipal leaders that are actively engaged in deploying, funding or operation broadband services and learn from their stories.

There are government agencies to help municipal broadband programs. RUS and NTIA both actively support communities that want to expand their broadband options. And they too can help you determine a plan that will fit the risk profile of your community. RUS and USDA are providing funding as well. I feel like that’s one of the confounding factors, is just understanding the funding vehicles and how daunting that could be. Because I’m sure it’s more than just filling out a form. There’s a lot of steps they have to go through that, and it’s not guaranteed. So municipalities put in all that effort and there’s only so much money that’s going around, but at least there’s money going into this world for those communities to start actively doing it.

With the FTC’s rural development opportunity fund, which we are amid forming the parameters for, it will release another 20 billion dollars. But that’s the kind of opportunity to transform the way government funding has been given for, in particular, rural communities. And it’ll be based on an auction and fiber deployment will, I think, have a superior vote in that auction. A superior weight.

Municipal Broadband Legal Concerns

Heather Gold: Today, there are 19 states that prohibit some sort of municipal ownership of broadband networks. But working with partners, you can. And then some of the electric utilities have some restrictions on their supplying of broadband, but it’s fascinating. Different states are changing their legislature, particularly for the utilities to offer more broadband. I think the way you fight against that, is if you’re in a state that has prohibitions, then you look more for partnership. If you’re in a state where there are legislative restrictions, feel encouraged because those restrictions are falling as legislative bodies understand that the utilities are uniquely situated to bring more broadband, particularly in rural areas. And that they are just hurting their own case by not unleashing them.

We’ve seen that in several states. I know you were in Kansas City and so you heard the Missouri Director of Broadband talk about the changes that happened in Missouri. And I was telling you about the changes in Virginia. So I think every state is becoming aware that the, in particular the electric utilities, have an asset to be used to bring deployment to areas where it’s been a challenge.

Pete Pizzutillo: The Pew Charitable Trust has a broadband project and just came out with a mapping by state of the legislation and contacts. If you are a community leader and you’re looking for your state help, there’s a good map if you go to Pew Charitable Trust Broadband Project to check that out.

Municipal Broadband Success Stories

Heather Gold: The size of your community will determine which ones are appropriate or germane, relevant for you. In the mid-size city category, obviously EPB Chattanooga, has been a great success. They built that network by first serving their electric customers is why they deployed that fiber. And then they expanded. But they’ve done great things there.   The city of Huntsville, which built a fiber backbone and is leasing that to any and all entities that want to serve consumers there. And I think there, I think it’s Google that is riding that fiber right now, but it’s open to anybody else. And then you have, Central Virginia Electric, which is southwest of Charlottesville, which is building a network up there. The city of Highland, Illinois, which has a municipal network built off of their electric. And then so those are some, Sandy, Oregon, United Electric Cooperative. Those are some of the utilities.

But you also have had some small competitors who have successfully worked with their communities to deploy. Such as High Water in Minnesota and CIT in Taylorsville, Illinois. So it just depends on who picks up the banner. I mentioned Grayson County, which is the County itself is working with AEP. So it just depends on who picks up that banner first on which direction you go.

© 2019 Enhanced Telecommunications.

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