The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch.
Pete Pizzutillo:
Hello, and welcome to another episode of The Broadband Bunch. Today, we speak to Bob Thompson, Founder, and CEO of Underline. Bob’s journey is an interesting one, from a banker to a medic, to a broadband advocate. He helps us understand the mission that brought him to solving the problem of rural broadband connectivity in the US. He digs into open access networks and helps us understand a different way to think about it from the historical view or the European view. We talk about the importance of sustainable broadband and how communities and private partnerships can be facilitated through transparency and collaboration. We talk about the keys to developing sustainable broadband and the impact that COVID has had on service providers, communities, and citizens, and how Bob sees the future of broadband connectivity, post the COVID challenge.
Pete Pizzutillo:
You have a great story and we’re eager to get into it. Help us better understand you, your journey to founding Underline, and your mission there as to how you came to the realization of the importance of what you are doing?
Underline CEO’s Journey to Broadband Advocate
Bob Thompson:
That’s probably a good place to start. Less about me, as much as I think it informs the reason why my colleagues and I are so passionate about this question that we’re attacking together. To give you some background and to put things in context for me personally…I’m a lifelong banker and finance guy, but I took a bit of an odd detour, back in 2010. I, along with some close friends, had a really strong sense of calling when the earthquake struck Haiti in January of 2010 – that we had to go down there and serve. So, we rallied together, and a bunch of things fell into place and we arrived in Port-au-Prince roughly four days after the earthquake and began serving as medics. What was a really scary and just catastrophic situation, turned into about an 18-month active engagement for me, personally, in Haiti.
Bob Thompson:
Including, in the middle of that, a roughly nine-month stretch, where I found myself responsible for three of the spontaneous displacement camps, the refugee camps that sprung up in the aftermath of that earthquake. It was in that context of feeling very morally responsible for the wellbeing of roughly 4,380 men, women, and children that I got hit square in the face with what I call my American ignorance, on the importance of infrastructure. I grew up here. So, I have a life experience where water comes out of every spout and spigot and you hit the light switch and it comes on every day, and so forth. But there I was in a place where there’s no power, there’s effectively no telecoms the way we would think of it, other than, thank God, the Digicel [mobile phone network provider] building didn’t fall down when the earthquake hit.
Bob Thompson:
As for water, I would come to work periodically, to be confronted by sick, or even in some cases, dead children, who were in that state for absolutely no good reason other than the lack of a clean drink of water. To be honest, it messed me up at first, in a human way, and then it made me mad! When I came back to the States, it started me on a still continuing, nine or 10-year process of reading about and studying and really reflecting, fairly deeply, on the role that critical infrastructure plays in the health and flourishing of society itself.
Bob Thompson:
So, here we are, my colleagues and I, and we’re taking that kind of life experience to reality. As I’ve come to understand over the last several years of studying the question, that if you look broadly at the United States – setting aside megacities and Tier One markets – if you look at the vast majority of American communities, that the truth is there’s an existential risk we face, from the serious and worsening state of American community infrastructure. That’s what we’re attacking, my colleagues and I, at Underline.
Pete Pizzutillo:
Thank you for having the desire and passion to do the things that a lot of us think about doing, but don’t actually get off the couch to go do. You don’t need to go to Haiti, (especially now with COVID), to see the disparities in broadband infrastructure. We live in bubbles and we think everyone is living the same way that we are. There are too many folks that are excluded from the fundamental right of being able to connect and communicate, to take care of their bills, to apply for jobs, or to learn. These fundamental capabilities are absent from a big portion of our country, let alone globally. I’m really interested in the mission that you have to help drag us into the light.
Bob Thompson:
I would argue that the only appropriate response to a calling like I had in Haiti, or even this calling that my colleagues and I share is, is one of being humbled in the face of the intersection of the importance and the necessity of fixing this. But also, that we, collectively, have actually been given the opportunity to do something about it. The intersection of those two truths is humbling more than anything else.
Modern & Interconnected Infrastructure Requires a Fiber Broadband Foundation
Pete Pizzutillo:
You have this realization and you’re rallying yourself and others to attack this problem. So, it’s 2019 and you’re forming this company called Underline. What’s your hope? What’s the approach that you hope Underline is going to bring to this problem, to this mission?
Bob Thompson:
Just to provide some grounding for my answer to that, when we look at American communities, focusing on Tier Two, Three, and Four communities, we see the necessity for the infrastructure, that these communities are going to have to have in order to be vibrant, competitive, and successful in the economy of today, let alone the economy of tomorrow. To summarize, what they need is modern and interconnected infrastructure. They need modernized community water systems; they need responsible energy and a smart grid. They need transportation and mobility solutions, and so on… All of those things have got to be data science-driven and enabled, which means that they must have community fiber first.
Bob Thompson:
It’s obvious, that it’s not possible to build modern and interconnected community infrastructure of those sorts if you don’t have a fiber extensive network in the community to move the data.
Bob Thompson:
Even 5G and so forth, all of those technologies are, of course, part of the solution, but all of those technologies require extensive fiber to move the sheer volume of data as well. So, we are an intelligent community infrastructure platform play because that’s the solution that we see our communities needing. However, because community fiber is the foundation, the precursor for all of those other things, we are entirely and solely focused today on partnering with communities to provide them with open access community fiber networks. Now, I would hasten to add one note… A big part of our mission, yes, of course, we’re a for-profit business. We want to be successful. We want to gain market share and partner with communities, all those things, but no one company is going to solve this whole problem.
Underline’s Focus on Open Access Fiber Broadband Networks
Bob Thompson:
A big part of our collective mission is we want to be part of changing the dialogue of how private industry partners with local communities, to produce this absolutely necessary outcome that our entire country is vibrant and competitive and has the infrastructure that’s necessary to be so. That’s our two-pronged goal.
Pete Pizzutillo:
You mentioned a lot there around open which has been a network approach that has been discussed for many years. It’s been prevalent in Europe for some time, but there are different flavors there. Help us to understand, how you interpret open access networks and why you think that contributes to a different conversation than what has been happening for 20 years or so.
Bob Thompson:
As with all big questions like that, this’ll probably be unfair to some, but to generalize, to try to be at least reasonably concise, I would offer a couple of observations. Number one, if we look at the exercise in Europe, and again, there’s a bunch of different models there, under various monikers of open access, but we’ve learned a couple of things from the open-access experience in Europe if we are willing to pay attention. So, one, probably the greatest lesson of open access in Scandinavia and other places is, that it’s actually possible to deliver ultra-fast connectivity, in a socially just way, and avoiding inefficient and duplicative Capex. Let me belabor that for one second, think for just a moment from the capital and a holistic society perspective of the grotesque inefficiency, from a capital, spend perspective, New York City has probably eight to 10 different sets of fiber piping running under the streets.
Bob Thompson:
Why? Because they’re a monopoly service provider that owns the fiber pipes and they all have to have their own. So, eight different times somebody trenched the street and dropped a bunch of fiber pipe capacity and so forth. If you look at the United States right now, where we sit, forget 20 years ago, we as a country have something like five to $8 trillion of deferred infrastructure Capex facing us. We can’t afford, as an economic system, the inefficiency of multiple companies, all building their own fiber pipes to compete for the same customers in the same geography. We literally can’t afford it as a system.
Pete Pizzutillo:
It’s not just the overbuild or the redundancy of fiber, there’s other platforms that are essentially redundant. From satellites to TV white space, there’s this rush to overbuild, essentially it’s a rush to the bottom, and it’s not sustainable. It’s a great approach if that’s what you mean about changing the dialogue, that it’s not about just getting the connectivity and all this capability and it’s “mine, mine, mine!” It’s about how do we build a sustainable, affordable, efficient, practical solution that’s future-proof, that lasts 50 years, not 20 years?
Open Access Fiber Networks – Good Public Policy
Bob Thompson:
That really gets me to my second point, which would be namely this, the European experience has taught us one other item about open access that’s highly informative. So, in most of the European examples, open access was really about benefiting the service providers, so they would avoid Capex. But to me, the way greater promise of open access and it’s fundamentally important to American communities from a public policy perspective, is that by virtue of separating the ownership of the fiber pipes, let’s call that the data transport. By separating that from the companies that can provide content and services over them, you achieve a bunch of important things, but I’ll just mention two. Number one, for our communities that need interconnected infrastructure and smart city applications, all these things that people talk about, from a public policy perspective it’s critical that you separate the ownership and control of the fiber pipes over which all that community data is going to flow, from the people that have the right to put content and services over it.
Bob Thompson:
So, there’s a public policy benefit of open access, the way that we envision it. Secondly, from a consumer benefit, our flavor of open access, where you create a competitive marketplace over ultra-fast fiber pipes, that will fuel innovators who will compete to provide value added content and services over a pipe agnostic consumer marketplace. The way that we consider open access, which is servicing content agnostic pipes with a software interface, to enable the promise of open access from a competitive market perspective, we think that’s absolutely the best solution for our communities and our citizens.
Pete Pizzutillo:
How do you “actionize” that? That is a fundamental shift in culture and DNA, as we think about it from a service provider side who are concerned about the bottom line first. Regardless of the impact of this COVID, there are certain markets that are just not going to be in play because they don’t make sense from a balance sheet perspective. And from a community side, there’s fear of the unknown in taking on that whole role of broadband management and that somebody’s going to come in and not understand who they are and what they really need, and try to apply someone else’s solution to their town. How are you dealing with those different stakeholders to facilitate that type of conversation?
Fiber Broadband and Social Justice
Bob Thompson:
I’ll try to hit a couple of pieces of that multi-part question as best I can. So, number one, from our perspective, as an admittedly for-profit, but a social purpose enterprise, we have to, in addition to providing ultra-fast conductivity for economic growth and so forth, we have to attack the social justice issue that wealthy parts of a given community have service and whether it’s MDUs or the lower socioeconomic demographics where cities have hundred year old copper pipe, where their children are sitting at McDonald’s in the parking lot, trying to do their homework. I mean, my gosh, we’re sitting here in the midst of the wealthiest society in history, we have to attack that, that’s just not acceptable in this day and age.
Bob Thompson:
Doing that absolutely necessitates any company who proposes to provide connectivity in a community, to actually invest the time and the effort in listening to the community, to the civic and other community leaders, to understand what their community looks like, to understand where the pockets of need and opportunity reside. It’s really only from that place of partnering with the community and understanding their uniqueness, that you can try to devise the right network design and capitalization structure, and potentially, when it’s warranted, a formalized partnering arrangement with the city.
Bob Thompson:
One of the things that we’ve committed to our community partners is to an ethic of transparency with them. Once you understand the community and the demography, and the business, residential, and municipal need, from a community fiber network, there’s a place where it becomes just math. Our approach to transparency means we’ll bring the math in front of the community and explain it. And if there’s a gap in the economics necessary to enable a socially just deployment, then jointly with the community, together we have to figure out how to close that gap, so that it actually gets built and built fairly.
Pete Pizzutillo:
Transparency is a great. There’s a lot of feasibility studies and there’s a whole ecosystem around helping communities think through the business model and the operational approach. Do you feel communities have the belief that they have the right to a full, transparent relationship? Isn’t there a bit of distrust between both sides? Are there communities saying, “Hey, we’ll bring you on the inside, but we’re going to need this type of assurances and visibility into how you all think and operate.”
Transparency Builds Community Trust in Deploying Open Access Networks
Bob Thompson:
It’s so interesting. To state the acutely obvious, every one of these communities is different. The culture and the atmosphere are different, but our experience is roughly the following. Some communities just welcome us with open arms, “Oh my gosh, you’re exactly what we’ve been hoping and dreaming for.” Some communities, and probably more on balance, are a bit cautious because they have some skepticism as a result of how they’ve been treated by the modern day “Ma Bells” that currently dominate this business. Or they have a bit of a smaller community skepticism of, some team of people flying in from New York or other big city saying, “We’re going to solve your problem.” So, we go through a pretty typical trust building exercise. We ask people to take at face value, certain assertions that we make about transparency and our ethics.
Bob Thompson:
We ask them to just test those over time and to call us out if we don’t honor them, but we’re committed to them, and so far, communities have taken us at our word. One of the things that we do generally at an appropriate, but early time, in the dialogue with the community leadership, is we explain to them that, if they’re interested and it’s not required), we will provide them a contractual option to purchase this network from us down the road. We’ve had a couple of interesting reactions to that. We’ve had a couple of communities like, “That is absolutely fair, as long as it’s properly documented.” We’ve had a couple of communities tell us, “We don’t think it’s the province of local government to be in the telecommunications business.”
Bob Thompson:
To which we respectfully reply, “Gotcha. But just think about it this way – if in fact it’s true that this community fiber network is going to become the predicate for your towns’ smart, modern and interconnected infrastructure, at a bare minimum you should want that option so that you have the ability to protect what happens over time to your infrastructure’s data.”
Bob Thompson:
In each of the two communities we’ve had that conversation, they’ve looked at me and went, “Yes, you’re right. We would want to understand that.” We always follow and say, “We’ll commit to be transparent and provide the economic reality, so you know exactly what you’re doing.” And the response is, “Wow, that sounds great.”
Pete Pizzutillo:
You’re walking into an interesting opportunity with the current crisis because the demand and the push for broadband are now aligned. We’re technologists, we’ve been pushing the capabilities for years and trying to get everybody to think about the value [of fiber broadband networks]. Now, obviously there’s a lot of pain, so people are saying, “We’ve got to get on this train.” But there’s got to be some folks wondering about the cost two years ago versus the cost and benefit post COVID. Not to use the word gouging, but when there’s a premium on the services that you’re providing, are you running into any suspicion that there’s also premium pricing happening right now?
Open Access Fiber Networks Critical to Sustainable Communities
Bob Thompson:
We have had some questions on that and there’s a couple of interesting components to what I would say in answer to that. Number one, sadly COVID and the experience of most of our communities as a result of the shutdown, has highlighted what we’ve been saying for multiple quarters now, to communities. Namely, that if you don’t have a community fiber network sufficient to enable everything from variable workplace strategy to upskilling and reskilling displaced workers, the absolute fact from our perspective that distributed medicine has got to be part of the solution for bringing efficiency to our healthcare industry, and then going all the way to all of the smart cities type applications that need to be built. We’ve been saying for some time, if you don’t have community fiber, you’re not going to have all of these things in place to be competitive. Well, sadly COVID just brought stark truth to those statements.
Bob Thompson:
When COVID happened, when the severity of it began to become clear, my colleagues and I took a little bit of a reset on our time to market strategy and built some additional technology. In addition, we took on quite intentionally the responsibility of coalescing an infra-tech consortium of companies, with each of the respective things that are necessary to do this at scale – ranging from national construction and labor to fiberglass and conduit manufacturing capacity etc.
Bob Thompson:
We’re in the midst of finalizing our initial consortium partners, and part of that, to the point of your question is that this is a country mission-oriented exercise. This is a long play. While we can run fast with the tailwind of COVID, we have to behave economically in light of the mission that we’re undertaking together. So, Mr. Consortium partner X, “I know what your price was last year, and I’m expecting it’s going to be the same price now.” That’s one of the commitments we’re asking from people, that we’re not going to seek to benefit from the current realization in the market, that communities have to tackle this problem all at the same time.
Pete Pizzutillo:
From the social, the term you used is social purpose, as well as the technology and I know we have some opportunity in another episode to speak to your CTO about that approach, but even just aligning a consortium in the supply chain. I think that’s amazing project and effort there. The question though I have is, there’s going to be a backlog because people haven’t been able to work and existing infrastructure programs have been slowed if not stopped over this time period. And now, we have this awareness and approval for new projects. Can the market sustain the demand that is coming or will be coming? And what are some of the things that, as a community, just advice to the community leadership, that they should be thinking about, to protect themselves about being realistic in terms of making these programs viable in a near-term?
Open Access Fiber Networks are Long Term Solutions
Bob Thompson:
You just hit on one of the great questions of the moment. So, I think what we would, and what we do counsel civic leaders on is, to think about this in two different phases in time. There is a tremendous risk from our perspective that either the government or what we euphemistically call the money hose, gets pointed at this problem and in a rush to do something measurable, people spend all that money inefficiently and produce short-term solutions like spinning up public Wi-Fi to try to project coverage in a given neighborhood. Now, by the way, in this moment in time, that’s a virtuous short-term thing to do, but that’s not the solution. That doesn’t remotely attack the question that we’re talking about.
Bob Thompson:
So, part of what we’re trying to encourage municipal leaders to think through is, how do you attack the imminent problem? But more importantly, let’s be prudent and thoughtful about the longer-term solution and design a community fiber network that actually meets your community’s needs today and as you look forward into the future. We’re also asked from time to time, “Why don’t you think municipalities should just build this themselves?” Our answer to that is, and I’ve said this to community leaders, “If you have all of the financing, the technical capacity and the ability to manage, own, and operate something this complicated over time, and you’re willing to undertake that, God bless, that’s one fewer community we have to worry about.”
Bob Thompson:
The reality is that the majority of the municipalities don’t have the capacity to attack this question and possession of all of those necessary attributes. That was part of assembling this consortium. So that we can go to a city and say, “Look, we bring Underline as an infra-tech consortium sponsor. We bring each of the components that are necessary to solve this problem in partnership with you.” Because the short-term necessity of having, call it public Wi-Fi, as an example, does not equate and remotely deal with the longer-term issue of smart and interconnected infrastructure in our communities.
Pete Pizzutillo:
That’s been the assumption from a lot of communities is, “If we can do this ourselves, we might as well do it ourselves.” But there’s also a lot to be said about being able to bring all the experience that you have, not just you, but anybody that’s done this before. That’s what I get worried about, is the bespoke efforts that are going to happen and historically only a handful of these have actually succeeded over the long-term. It’s not a knock on anybody other than the realization that this stuff’s hard and things change. It’s a really challenging problem to build the systems that we need for the future versus what we need in the short-term. How do we know how long of a future? Is it 20 years? 50 years? Plus, there are a lot of other things involved in running a city and a community, not just broadband and Wi-Fi.
Pete Pizzutillo:
I feel like the COVID crisis is settling down in terms of its impact on how we operate as businesses and schools. People are starting to figure out how to manage this all from home and are picking their heads up now to say, “Okay, we’ve survived the first wave. Let’s be sure if there is a second wave – of not just infections, but impact to the systems – that we can manage that better.”
Pete Pizzutillo:
There’s all this additional funding that’s coming out and I have concerns that the people that are winning the funding are not the people that need the help. If you have the ability to get CAF 2 funding or RDOF, it’s the communities that can’t rally support or get organized enough to do it. Partnering with folks like you at Underline, organizations that can come in soup to nuts and provide an opportunity to solve the entire problem of deploying sustainable community fiber broadband networks, including the funding, will help solve this problem in the long-term.
Bob Thompson:
Absolutely. At the end of COVID, what’s it going to mean? Gosh, I wish I knew. But one thing I think it is going to mean, without question, is that this country is an astounding place. I’ve had the benefit of being around large parts of the world and there is something amazing about our economy and its ability to evolve and innovate.
Bob Thompson:
Even if we don’t have, God willing, a second wave of COVID lockdowns – the innovation and evolution in our economy is already starting with new businesses that can be formed or existing businesses that can attract and retain and leverage talent on a more distributed basis. One thing we’ve all learned was maybe we don’t need all 300 of the company’s employees in the same office building, (and this was painful because I kind of liked the benefit of seeing four different walls every day).
Bob Thompson:
If I’m an employer, for example, in Topeka, and the talent that I need to access happens to be found in Maine, maybe I can harness that and actually use it? That’s all presumptive on the notion that you have a telecommunications network that will support all of that. Let’s just label that broadly, variable workplace strategy. That and other realizations that players in our economy are coming to, as a result of COVID, those are not going to go away. Those are going to be more and more important, and will evolve, and will take on contour and texture over time as the economy flexes and grows and innovate. We want to pour some kerosene on that campfire.
Bob Thompson:
Why does it need to be open access? Empirically we can look at an existing system where you have vertically integrated or monopolistic companies that control both pipe and service, and we can empirically observe quality and price and innovation, by which I mean not great. Then we can think about what if a community has ubiquitous ultra-fast connectivity? And there’s a competitive marketplace that fosters this incredible economy’s ability to innovate, to create new value added content, and new types of services to run over those fast pipes. That’s the outcome that we’re excited about, which fits so squarely with what we believe the reality of the outcome of COVID is going to be, which is a more flexible, more innovative and probably more distributed economy.
Learn More
Pete Pizzutillo:
How can our listeners learn more about Underline, your partners, the folks that you’re working with, and the consortium that you referred to earlier?
Bob Thompson:
We welcome anyone to check us out on underline.com. We publish as a group, because we are committed to the notion of trying to help shape and change the dialogue. We also publish on Medium, under Underlining Communities. I’d also really encourage your listeners to continue their own process of reading and thinking and talking about this, because collectively we have to get this done. We have to form the dialogue, going in the right direction and we have to go bring all of our communities into a vibrant future.
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