Transcript: Community Broadband Bits Episode 106

Thanks to Jeff Hoel for providing the transcript for episode 106 of the Community Broadband Bits podcast with Vince Jordan on lessons from Longmont, Colorado. Listen to this episode here.

 

00:15:

Vince Jordan:  You're as concerned, or more concerned, about the end user experience than you are just hooking up that next subscriber and getting that monthly subscription rate in and, you know, training them to put up with mediocre service -- which is what all the rest of the providers of the country do.

00:31:

Lisa Gonzalez:  Hello, and welcome again to the Community Broadband Bits Podcast from the Institute for Local Self-Reliance.  This is Lisa Gonzalez.

This week, Vince Jordan, from Longmont, Colorado, returns to talk with Chris.  The last time Vince was with us, he was the Broadband Services Manager for Longmont Power & Communications.  Vince recently decided to spread his wings and is now concentrating on his firm Ridgeview Solutions.  He still has his fingers on the pulse of Longmont's network, however, and in this episode, he brings us up to speed on LPC's fiber network.

When we last spoke with Vince, Longmont had just started offering gigabit services and were in the throes of a referendum.  Longmont voters overwhelmingly passed a measure to bond in order to speed up the municipal network expansion, and the project is moving forward.  Vince offers some of the discoveries he and LPC have made along the way -- how they managed to keep services reasonably-priced.  And he offers great advice on the importance of customer service.

01:45:

Chris Mitchell:  Welcome to another edition of the Community Broadband Bits Podcast.  I'm Chris Mitchell.  Today, I'm speaking with Vince Jordan.  We're back with Vince from Longmont, Colorado.  Welcome to the show.

01:56:

Vince Jordan:  Thank you, Chris.  Always a pleasure to be here and speak with you.

02:00:

Chris:  So, Vince, you're from Longmont.  You're still in that area.  But you've actually left the City of Longmont's employ, and you've gone back to your roots as an entrepreneur.  You are a private citizen, and the principal of Ridgeview Solutions, your -- the company you're working for -- your own company -- before you went to work for the City of Longmont.  So, I guess, to some extent, you know, welcome to the new-found freedom of unemployment -- or being self-employed -- I know how that goes.

02:21:

Vince:  Right.  Consultants, right?  It's a euphemism for being unemployed.

02:25:

Chris:  Yes.  And I, you know, I just say, as someone who also supports my work with photography, I have a sense of what that's like.  We have, you know, some similar experiences from time to time.

02:42:

Vince:  Yeah.  No.  It's -- Thanks, Chris.  It's --  It was really very exciting to, you know, be with the city at the beginning of the effort.  And even, you know, before that -- right? -- I was involved with them -- as a private citizen at the beginning.  And I'm still involved as a private citizen afterwards, in terms of, you know, big supporter for this.  And -- back to the entrepreneur gig, which, you know, you can take the boy out of the -- being an entrepreneur, but you can't take the entrepreneur out of the boy, apparently.  So....

03:14:

Chris:  No.  And I appreciate that.  And think it's important to note that even through people like you and I don't have the skill set that it takes, I think, to really spend a lot of time doing the necessary work of government -- or even, to some extent, I'd say, bureaucracy, because large companies are the same way -- I think we appreciate that there's some people who do that well.  It's just not for you and I.

03:35:

Vince:  Absolutely!  Yeah.  I mean, it takes all kinds, and everybody, to make the world work, you know.  And we all have different temperaments, and different skill sets, for sure.

03:44:

Chris:  So let's just jump right in.  You're not so long gone from the City of Longmont.  And we'd really like to get an update on what's happening with the gigabit network that's being rolled out.  The last time we talked with you, there was a referendum, and there was the opportunity to build the network all at once, and it's all moving forward now.

04:03:

Vince:  Yes it is.  The referendum passed handily.  So that was for a $40 million bond issue, last November.  And we almost hit 70%.  I think we were somewhere around 68+ percent of the vote in support of it.  If you had tracked Longmont's -- I know you did -- you know, Longmont's multiple votes regarding this issue -- in 2009, and 2011, and again last year.  You know, the support rate just kept going higher and higher and higher.  And that was the biggest showing that we'd had to date.  A design firm was hired.  And that design process, you know, started, and is continuing even now.  Next month, they open the bidding to firms that have already been qualified to do the build.  And they are going to begin the actual build-out in the August-September timeframe, and start putting customers on -- new customers, additional customers -- by the end of this year.  The city, in the early design phase, has been carved up into six zones, each zone roughly being 5,000 drops -- residents and businesses.  And so Zone 1 will start this year, and then move up to 2, 3, and go around the city, and...  You know, they're still saying it's a three-year build-out, but they're looking at ways of accelerating that.  Because they know the folks in Zone 6 don't want to wait three years to get their service.

05:36:

Chris:  Let's talk a little bit about the folks who have already been connected -- in those, sort of, pilot areas -- the early areas to be connected.  About how many residents already have access, from the early work you did?

05:50:

Vince:  There's the one pilot that we did where we build some aerial connections.  We wanted to put in place some aerial infrastructure and connections.  A very targeted pilot.  It was almost a similar thing to a Google fiberhood, where we had spoken with those folks ahead of time.  The take rate there ended up being 60%.  And then there was an existing neighborhood, where the developer had already laid in, to half of the homes, fiber-to-the-home, and then had passed the rest of the homes.  I'm not sure what the take rate has been so far, but I know that the inquiries there -- I mean, it's high.  And the inquiries there are daily.  So the neighbors are talking to the neighbors.  You know, once they invite somebody to go over to the house, to say, here, let me show you what 700 meg, up and down, looks like.  'Cause that's about what they're squeezing out of a gig connection, just based on their own infrastructure.  And, you know, they want to get hooked up.  So I expect, you know, over time, the take rate there to be probably representative of the pilot neighborhood -- in the 60%, if not better, range.

06:49:

Chris:  That's an enviable place to be.  I'd sure wish to be in a neighborhood like that.

06:51:

Vince:  Yes.  The developer for that neighborhood -- he did that over a decade ago.  Talk about, you know, seeing the future, when he was putting that neighborhood in.  I mean, he knew about the city's network.  In fact, this was prior to Senate Bill 152 being passed.  And, in the early days, he was going to partner with the city, you know, to bring, you know, broadband services via the fiber to the home.  And then, before he got the neighborhood built, SB152 got passed, and that kind of put the kibosh on that.  But now, there's fiber going past half of the homes and fiber TO half of the homes.  And it's a very exciting place for them to be.  And they are in Zone 1 as well.  So they're being turned on in the next couple of months.  So -- very exciting for all those folks.

07:40:

Chris:  I know that you had to give some unexpected news to some businesses that you turned on, when you found that there was a slight error in how you calculated their prices.  And you never want to change price shortly after delivering a service to customers.  So, why don't you tell us a little bit about what happened there?

07:57:

Vince:  That was pretty interesting.  You know, ....

07:58:

Chris:  A little embarrassing, frankly.

07:58:

Vince:  It was a little embarrassing.  You know, we did what we could, to set up the pricing, and do the math properly, and all that.  And we started turning businesses on.  And as soon as we started reaching out to them, you know, it was just one after the other -- they wanted the service.  And after hooking up the first, oh, I don't know, it was like 10-15, we looked at the pricing and realized we'd made a mistake.  And so I had to go back to the customers that we were providing the 100 megabit service to and tell them that we needed to drop their bill by $50 a month -- from it's already-ridiculously-low price.

08:40:

Chris:  I'll bet you had some big smiling faces and offers to buy you a beer.

08:45:

Vince:  It was actually kind of funny.  They looked at me kind of quizzically, and they're like, no, really?  And I said, no, sorry, I've been overcharging you for the last three months.  And they're like, yeah, but you're charging me a fifth of what I was paying before, for 10 times the speed.  And I'm like, I know, but I need to drop your bill.

09:07:

Chris:  It's a good problem to have.

09:10:

Vince:  It was great.  You know, it's some funny looks, though.  You know, like, OK.  Wow!  So, municipal broadband -- this is really cool!

09:20:

Chris:  So, what is that overall price for 100 megabits symmetrical?

09:23:

Vince:  100 megabits symmetrical is $229.95 a month for a business.

09:26:

Chris:  That's what it is today.  But tomorrow, you might be knocking on some doors, or the power company....

09:31:

Vince:  Oh.  Yeah.  Yeah.  I mean, as this thing gets rolled out, as it gets scaled up, as we're able to, you know, do better on our backhaul prices, which we're actually set up to do fantastic on, yeah, these prices could even go down.

09:45:

Chris:  That's a really impressive connection for that kind of speed for a business level service.

09:50:

Vince:  Well, I mean, considering the folks that I had put on this were coming off bonded T1s -- so, you know, the equivalent of basically 3 megs symmetrical -- for $1500 a month, and they go to 100 megs symmetrical for $229.95 -- yeah, everyone seems to be very happy.

10:11:

Chris:  So let's dig into a little bit of the economics of that.  You know, there's some people who respond to the -- either the pricing you have for businesses or the fact that you're going to be rolling out -- that Longmont's going to be rolling out $50 a month for a gigabit to the home, for people who sign on early.  And there's some suspicion that maybe you're just really oversubscribing people at a ridiculous amount and no one's ever going to get it.  You know, walk us through how the -- how you're able to deliver a gigabit at such an affordable rate.

10:41:

Vince:  Number one, the municipality itself -- LPC itself -- is the service provider.  So you're cutting out the middle-man, and all that sort of thing.  And, you know, it's a direct service provider to the customer.  Number two, it's really -- you know, when you look at the utilization -- and we monitor it real close, in the early pilots and the early customers that we put on.  And, you know, I liken it to the fact that not everybody hits the enter key at the same time.  And people are getting the service they're signing up for.  I mean, we've gone into, you know, ....  I made a house call to almost every original resident we put on, helped them with their internal infrastructure.  Because what happened was, you know, we're bringing a fire hose to the side of their house, and it turns out that they have a straw going into the house and throughout the house.  And so we've worked with them to, you know, at least put a good-sized hose in the house, so they could take advantage of this.  And so they really are getting the service.  So in the actual utilization, day to day -- this is the interesting thing that we're seeing, and I think this is probably a key point for anybody looking at providing the service -- what people do all day long, and what they're attempting to do all day long, doesn't really change when you bring them a gigabit pipe.  It works better.  And, you know, all of a sudden, everything's instant.  And maybe last week, you know, you couldn't stream a movie to the iPad AND the television at the same time where now you can.  But they don't really go insane and, like, you know, set up a data center down in their basement.

12:23:

Chris:  Right.  Yeah.  I think of it like, I'm going to listen to the same podcast next week that I listened to this week, and I'm going to read XKCD.  I'm not going to suddenly load XKCD 100,000 times.

12:35:

Vince:  Exactly.  And you're not going to be streaming, you know, CNN and Fox News and all these videos coming.  You don't really change the way you use the Internet, but it just gets better.  It's faster.  It's immediate.  You might do a few more things that you haven't done before, because it was so painful to do.  Download some more movies, upload some more videos.  You know, that sort of thing.  But it doesn't -- people don't get crazy.  It works for everybody.  And then on top of that, one of the things that we set out to do, very early on, was:  get connectivity to wholesale bandwidth carriers, that are kind of scattered throughout the county -- and there's a couple in Denver -- where we're able to buy bandwidth, now, amazingly, for about a tenth of what we were purchasing it before.

13:15:

Chris:  Yeah.  That will make a difference!

13:17:

Vince:  Oh, yeah, right?  And again, being a not-for-profit, municipal broadband service provider, I mean, we're there for the community -- to serve the community.  A for-profit corporation would look at that opportunity to get bandwidth at 10% of what they were paying before and go WOOHOO, MORE PROFITS!!

13:34:

Chris:  Right.

13:41:

Vince:  Right?

13:43:

Chris:  Yes.  Particularly one that's not located in even Colorado, let alone in Longmont.  And, I mean, certainly local businesses would pass that along, I'm sure.

13:51:

Vince: Or some level of it, right?

13:54:

Chris:  Right.

13:54:

Vince:  But when it's a municipality, I mean, that's what the municipality is here to do.

13:59:

Chris:  You have a background as an operator, something that not every community has, in terms of the person who's heading up a fiber project like this.  So, let's just talk for a second.  For people aren't really familiar with how you purchase bandwidth.  You basically are buying it from someone.  And you're paying on the basis of, like, the 95th percentile.  And the best way I've heard this described is, basically, like, you take, every five minutes, for the whole month.  You average....  You add up the total amount of bytes transferred.  And then you basically throw out the top five percent.  And then you have to pay for the 95th percentile, and that's your bill.  And so that's where, I think, to some extent, it doesn't matter when people -- if you're using the Internet, really going crazy at 4 am in the morning, it literally doesn't cost Longmont a dime.

14:51:

Vince:  That's correct.  I mean, it's not exponential, like you think it would be.

14:56:

Chris.  Right.  So that's where, when you're talking about this issue of, you know, people not changing their habits, ....  I mean, some people have explained it -- and I'm curious about you take on this -- that, basically, it could even LOWER your prices to some extent, because people are not congesting the line, which would then result in more retransmits and things like that, based on the protocol.  I mean, I don't know if that's a real phenomenon or not.

15:19:

Vince:  That generally wouldn't cause a great deal of line congestion, but it definitely, you know, affects the efficiency of the overall network.  That's for sure.  And the experience of everybody on the network.  You know, there's so much technology that comes into this, right?  I mean, you've got your, you know, fiber your fiber-to-the-home.  You've got your OLTs.  You've got your switches and everything else involved with this.  And everything affects everything.  With the backhaul, it is an interesting phenomenon.  And, you know, it's one of the things that, being in the business, outside of the municipality -- I mean, I've been in the telecommunications business for a long time -- and so when I hear the incumbents whine about this thing or that thing, I kind of smirk and shrug and go, uh-huh, yeah, not really.  You can oversubscribe a meg.  So whatever you're paying for a meg, generally speaking -- the rule of thumb -- you can oversubscribe that 20-25 times -- you know, depending on the market, and who you're selling into, and all that.  Businesses are very steady users during the day.  Residents are steady in the evenings.  That's the other thing to take into consideration, when you're doing, you know, a roll-out into an entire market.  You know, I mean, there are businesses that operate 24 x 7.  But in a, you know, community like Longmont, there's not very many of those.  So that kind of spreads utilization out.  What I have found over the years is that the best thing to do is: monitor your overall utilization, day and night.  When you get into about 75-80 percent of your backhaul, being used....  So the backhaul is what we buy from somebody like a Level 3 or a Zale or even CenturyLink.  There's places in Colorado where you buy backhaul from CenturyLink, 'cause they're the only one there.  You monitor that utilization -- how much you're using of that -- and if you stay ahead of that – if you're a good provider, you know, you won't let that get over 80 percent before you add more.

17:11:

Chris:  Right.

17:11:

Vince:  And the experience that your end users will have will be very good, regardless of where you're getting your backhaul from.

17:18:

Chris:  What would you say, as someone who has this operational experience -- what did you see at Longmont that you were able to help them with that they might not have known if they were just hiring someone who didn't have that level of sophistication in their history?

17:31:

Vince:  Well, you know, I think the biggest thing, from being a previous operator, that you bring to the table right away, that if you haven't been an operator, isn't going to show up until later, is the level of customer service required to do this.  Everything else -- you know, everything else is technology.  And then you get human beings involved.  It's a very different game, if you think about it from a power company perspective.  Right?  You get the power to the house, the power goes on, and unless the power goes out, or there's some issue with the bill, you never hear from anybody.

18:07:

Chris:  Right.

18:07:

Vince:  When you're a broadband service provider, when you provide services to businesses, it's kind of like the electric.  You get it there.  It's all working.  Unless there's a problem on your end, they're good -- because they have an IT organization that takes care of everything in the house.  On the residential side of the equation, not so much.

18:26:

Chris:  Yeah.  You've got someone like me who calls up and says, I need more television channels now.  Because even though I've been without cable for ten years, the World Cup's on, and suddenly I need to see it.

18:33:

Vince:  Yeah.  I need to see it, right?  Or, take it back a step.  Right?  And the phone call I love to get is -- you know, people call in and they go, the Internet is down.  And, you know, you're immediate response is, you know, if the Internet were down, it would be national news and the world would be coming apart.

18:52:

Chris:  Yes.  Yes.  That's a fact.

18:52:

Vince:  I'm pretty sure what you're trying to tell me is that you're not able to access the Internet right now.  This is a thing that's a challenge for anybody getting into this business.  And, being a previous operator, one of the things I think I brought to the conversation, you know, early on was that it doesn't matter that your service is working properly.  They just upgraded their browser and it reset their security settings.  They just upgraded their anti-virus, and it reset their security settings.  And all of a sudden, the sites they could get to yesterday, they can't get to today.  And it's your problem, because you're the ISP.  And so the question you've got to ask yourself is, how are you going to handle that?  Are you going to answer, I'm sorry, the connection's good; you're going to have to figure this out?  Or, are you going to, you know, step it up in terms of customer service and go, tell me what's changed in your environment in the last 24 hours, and we'll figure this out?

19:55:

Chris:  You know, what I find funny is that if you go back -- Now, Longmont just celebrated 100 years of public service with the municipal utility.  And if you go back to 80 years ago, I'll bet, the City of Longmont, the utility company, was almost certainly teaching people how to use electricity.

20:10:

Vince:  Yes.

20:10:

Chris:  And so, it's more of a return to roots than something new.  It's just that we haven't thought about it in decades.

20:16:

Vince:  Exactly.  No, that is a great analogy.  And you're right on.  And, in fact, the other thing that we talked about, and that we really learned from the pilots -- the general metric for having an installer show up in somebody's home, get them up and running, and get out of there is like 45 minutes.  Right?  We decided -- you know, the last conversations that were had at LPC were -- you know, this could be a two-hour installation, because you could be spending quite a bit of time with the customer after you've brought that fire hose to their house, looking at their internal infrastructure, and looking at their internal set-up, and guiding them through the process of actually being able to take advantage of that gigabit connection that they just signed up for.  That's what happened in our pilot projects.  Like I said, I made a house call to just about every single resident that we hooked up.

21:02:

Chris:  That's hard to scale.  Although I know that Chattanooga's been doing that as well.  You know, they set it up, and they also make sure you know how to use the remote control, and they may help you switch things over.  They've really gone that extra length, because that's what happens when you're locally owned.

21:17:

Vince:  Exactly.  You're as concerned, or more concerned, about the end user experience than you are just hooking up that next subscriber and getting that monthly subscription rate in and, you know, training them to put up with mediocre service -- which is what all the rest of the providers of the country do.

21:35:

Chris:  Well, thank you so much, Vince.  It's always great to talk to you.  I had a wonderful time being able to spend time with you while I was in Colorado for Mountain Connect.  And I really look forward to seeing where you go next.  I know you're going to be helping some other communities out.  So, good luck!

21:55:

Vince:  Thank you, Chris.  I appreciate it.  It's always a pleasure having you out here in Colorado.  You know the invitation's always there.

22:01:

Lisa:  We've been watching reporting on Longmont since 2009.  You can find a number of articles on that community on muninetworks.org.  You can also link to LPC from the Longmont city page to learn more the utility and all it has to offer.

Send us your ideas for the show.  E-mail us at podcast@muninetworks.org.  You can follow us on Twitter.  Our handle is @communitynets.  Thank you again to Waylon Thornton for the music.  The song is "Bronco Romp," and it's licensed using Creative Commons.

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