Transcript: Community Broadband Bits Episode 12

This is Episode 12 of the Community Broadband Bits Podcast. Todd Murren explains the creation of SpringNet in Springfield, Missouri and how the community network helped with economic development. Listen to this episode here.

Lisa: Hello and welcome to the 12th edition of the Community Broadband Bits podcast. This is Lisa Gonzalez with the Institute for Local Self-Reliance and a writer for muninetworks.org. In this edition, Christopher Mitchell interviews Todd Murren, the Director of SpringNet, servicing businesses in Springfield, Missouri with a high capacity of fiber network. Todd tells a little about the history of SpringNet, including how legislature changes in Missouri set a course for the network to serve local businesses. Todd also talks about economic development in SpringNet and how the network helped insure 400 local jobs and travel giant Expedia. At the time, a national carrier couldn't follow through with promises. Here are Chris and Todd.

Christopher: Welcome, Todd Murren, director of SpringNet. We're really excited to have you on the show today.

Todd: Thank you. I appreciate the opportunity.

Christopher: You are the director of SpringNet, which is offering broadband internet connection-type services in Missouri. Can you tell us a little bit about your city and the area around it?

Todd: Certainly. Certainly. We're located in southwest Missouri. A diversified economy, strong entrepreneurial spirit, heavy in education and medical. We're a mid-west city, so you have that mid-west thought process. A very strong chamber. That all lends very well to a very progressive innovative community.

Christopher: About how many people are in Springfield?

Todd: About 150,000. That's Springfield proper. There are bedroom communities and, if you include those, which, and this is a good point, this is slightly different than other municipal utilities. We actually have a service territory that is outside of the municipal incorporated area, outside of the city limits of Springfield, Missouri. Then, you're looking at a population of around 200,000.

Christopher: We see that similarly with a few of the municipal networks. Cedar Falls in Iowa.

Todd: Good.

Christopher: Chattanooga, Tennessee. It's rare, it seems, but it's certainly not totally out of the ordinary. Can you tell us a little bit about how SpringNet got started?

Todd: I'd be happy to. We, SpringNet City Utilities. City Utilities of Springfield, Missouri is the utility really started in some very simple applications. It started with serving our own needs. We, fortunately, or unfortunately, I was here in 1986. It was an experiment. Let's put some fiber up. Let's see if this is real or if this is smoke-and-magic. Let's try it between a couple of our locations. We put it up in 1987. It worked flawlessly. Now, we're not talking gigabytes per second. We're talking substation, relay. Think of it as a light switch. Is the relay open? Or, is the relay closed? Very, very simple needs, but it's fiber. It doesn't conduct electricity, which, when you're going in-and-out of a substation, is very, very important. We may cast it in a simple term and go, "Yeah, you know, It's a light switch." I got news for you. Relaying in a substation determines whether that relay is open or closed and depends on whether thousands of people are without electricity or not. Yes, it's a one or a zero in a binary world, but there's a big difference between it. Very important to us. That's how we started. We tried it. It wasn't smoke-and-magic-and-mirrors. It was real. It was a disruptive from a communications technology. We were beginning to get the glimpse of how disruptive it was. I'll open it up to the next element that we learned in the early 90s. This is a great conductor for communications. It's expandable. It stretches. It's like a rubber band. In other words, yesterday it was a one or a zero for relaying, now, wait a minute, we're going to run fiber optics to this customer service operation. In those days, I need two or three T-1s to carry voice conversation. I didn't have to do anything to the fiber. We have upgrade electronics on both ends of it. What would our electric gas and water worlds be like if we could install that water line underground? Today, it only needs to be a 3" main, but, in a year and a half, it needs to be a 12" main. We just put some stuff on the end of the pipe and "Poof!", it's a 12" main.

Christopher: You're using the same fiber and, over time, you're able to do so much more with it, without having to really dig up the streets again or anything like that?

Todd: That original 1987 fiber that was communicating a one and a zero off or on, today, is carrying 10 gigabytes per second.

Christopher: That's incredible.

Todd: That is incredible. It's mind boggling. That's the disruptive. As the world has transitioned to digital and it's not something that wireless is going to replace because you can't argue with physics. We have a limited amount of spectrum. It's a wonderful thing because it allows us all to be mobile, but it's a finite resource. It's spectrum. You rest assured, because we're seeing it today, the minute you collect enough at a collection point of wireless antennae attachment, it immediately goes to a wired network. That wired network is fiber.

Christopher: Let's fast forward to 1996-ish. You have fiber all over the city at this point for your utility needs. Suddenly, the federal law changes and you have the ability to potentially serve others.

Todd: 1996, 1997 really cast the role that we were going to play in this community. You know, over time, that's the benefit of having time looking back on it, you could go, "Well, that was a good thing. It was a bad thing, at that time." I'll shed a little light on how possibly is was a very good thing because the world of communications in 1996 and '97, is certainly not the world that we have today. So, 1996, you're correct. Everything changes. The local telecommunications monopoly is now deregulated. It's an opportunity for others to get into that business. The natural thought ... That would be electric utilities. Whether they're investor or coop or muni, because all of the same resources are present in those communities. People, trucks, coals, access to Right-of-Way, knowledge and outside plant. As we found out, when you take a monopoly industry and you turn its form, there's a lot of strings that get pulled, maybe is a great way to say that. For us, we went to the FCC and we posed the question. I am condensing this tremendously, okay? The FCC came back and said, "You know, we believe that you can and should and do play a role in this with the Telecommunication Act of 1996." We got a difference of opinion at a different FCC court. Now, we've got the judicial involved. The court case itself went all the way to the United States Supreme Court, which did a marvelous job for us. The interesting to note through all of that is we touched on two elements at a federal level. We touched on the regulatory body for us, the FCC, and we certainly touched on the judicial side. What they clearly, in my opinion as a non-lawyer said, "This is a state and a local issue, but let me tell you what we think. For the good of the nation, you really need to do these things. You need to make your public rights of way accessible. You need to develop this, but that is the rights of States." It came with a pretty heavy-handed. This is we think would be good for the nation, but it is your call, States. Out of, almost immediately, in relative terms, there was a legislation presented in our State capital, that was very restrictive. I compare it to getting permission to be an electric utility but you can only provide electricity to the iron, the can opener, and the refrigerator. Now, how successful in business am I going to be? Because ultimately, you still have to be a business. You have to produce revenue. You have to be profitable. If I've got all of the electrical infrastructure in place, transmission, distribution, sub-station, transformation, to provide electricity to the home, at the very end, I can only capture about 10% of the load in the house. You're destined to be doomed. At the very end of that law that was signed by the Governor, it said, "Oh, yeah, and you can do internet-type services." Really? Well, in 1997, what does that mean?

Christopher: People don't realize just how different it was. We've all become so used to what the internet's turned into, but in 1997, it was dial-up. Images were a new thing. It was a totally different internet. There was no pre-destiny that it was going to end up this way.

Todd: Exactly. We're heavily influenced by, and we always are. It's not ... Perception creates reality. I can remember back then, Jim and I doing some presentations. I had this slide. We had, over on the left, we had one 800-pound gorilla called the cable TV industry. They were doing their thing. It was video. One way distribution. Video. On the right hand side, we had the 800-pound gorilla called the telephone company. It was private line, TDM stuff, and dial tone. These two 800-pound gorillas were running towards one another. It was that cloud in the middle called the internet. Fast forward to 2012, now look at it. Both of those industries are heading right towards internet transport. That's their focus now. Well, in 1997, you had internet back then. That's fine, because at that time, well, that's just dial-up. "Yeah, you can be an ISP. Buy all your phone lines from us. You knock yourself out." There were some restrictions that didn't allow us, and this is important, and this is what separates us from a lot of our other brethren out there. You can't serve residential. Wait a minute. When I'm a municipal utility, that's what I do. You serve your entire community with electric, gas and water. What do you mean I can't serve my ... I can't get into the residential business? Well, we couldn't. That meant focus on the business, which, hindsight ... Looking at that law in hindsight, and this is going to sound strange, probably was a very good thing for us. You know what it did? It put us about ten years ahead of our competition. In the market that we were allowed to compete in, the business sector, you forced us to look at things and to predict into the future. Now, let me translate that. In 1999, we took our fiber optic cable plant and we said, "You know what? This T1s and T3s and OCs, we're not very cost-effective there. Let's do Ethernet." We ordered the stuff. We ordered Ethernet equipment, in Thanksgiving 1997. We got it in January and we started to put it in. We put it in boxes and hung it on poles. We got within blocks of the customer with it, at that point, ten megabyte and 100 megabyte connectivity within the business customer.

Christopher: Just briefly, why is Ethernet important?

Todd: Number one, at the time, it was less capital intensive than going out and buying the phone company, SONET nodes, OCT12s, OCN and all of that. We brought to the business community, the only market that we were allowed to serve, and that is still the case today, Ethernet. When you bring a new product to a market, the business community for us, that is completely new, it's a long sale, if you will. I can recall one of the conversations we were having at that time with one of our, at that point, small, a young firm. One of the gentlemen goes, "I get it. This is like an Ethernet extension cord for me." I'm like, "That is precisely what it is. Do you need to connect with somebody else across town or do you need to connect with the internet? It's the technology that you understand. It's Ethernet." We did that in January of 2000. This is 2012. You're just now in some areas seeing the phone companies and the cable companies offer metro Ethernet services. The law and the legislation in that effort put us in the driver's seat here.

Christopher: It's a great sign that a bad law doesn't end anything and creative cities can still make important investments by figuring out what avenues are still available to them and not giving up.

Todd: Yes. You have to have the desire. You have to have the desire to make your community attractive. It is serving us very well right now. We're much like Lafayette and Chattanooga, we upgraded the network. That same fiber that we put up in 1987, now is carrying 1 and 10 gigabyte per second lengths. We upgraded to 10 gig all of our customers. Our customer facing interface, is 1,000 megabytes, 1 gigabyte. The interesting thing about that is, you go to a customer, you go, "What are your needs?" Essentially, we have two flavors of ice cream, if you will. I'm drawing some very simple pictures here. "Do you need to be connected to the internet and we can talk about that?" Or, "Do you need private network or V-line connections across town, or across the State, or to other like businesses or things you share across your 'enterprise network.'" We don't need to talk about "What's the circuit speeds? What do you need?" If you go to the customer and they go, "Well, my applications' guys say, 'We really need 33 megabytes a second.'" "Okay, fine." We're running fiber to your business. Any limitations there with bandwidth? None, whatsoever. Then, we have to do the electrical to optical conversion. We do that. Of course, we're Ethernet all the way. Ethernet comes in very convenient packages. One is a very old package, 10 megabytes a second. 100 megabytes a second or a gigabyte. Today, that electrical to optical conversion is a gigabyte a second. Any limitations there? Well, I guess a gigabyte, but, let's just go with it. They've got no limitations there. You need 33 megabytes, right? That's what we'll sign you up for 33 megabytes. Now, let's have another discussion because when you're doing that presentation and, you need 33 megabytes, except next Wednesday, when I'm doing that presentation or I'm uploading or I've got a very important client. It's probably going to be 51 megabytes. I don't care. It's okay. There is nothing coded in there that is going to stop you at 33 megabytes. Our services are burstable. It's bits per second. If I don't need that capacity on the network for this next second, of course, you can use it. If it helps you, go for it. That's been a real thought process, a very disruptive or transformative thought process for a business community, but they get it now.

Christopher: What you've done is you've turned a market that's been defined by the big carriers in terms of scarcity and turned it into abundance.

Todd: Exactly.

Christopher: It's tremendous for businesses.

Todd: Make it. That's what's going on in Kansas City and Chattanooga. It's, "Look, here's a gig now. We're not going to talk about a scarcity. Here's a gig. See what you can do with it." My network architectural manager, I mean he's got a great line. "What do people do with a gig when you give it to them? They figure out how to use it."

Christopher: Right.

Todd: We started in 2000. It was a 1 gigabyte core backbone. Today's it's 10 gigabyte.

Christopher: Let's talk a little bit about what the result has been for the community. Have you seen new jobs? Have you seen more businesses moving in? Have you heard any quotes or antidotes from them about how your services help?

Todd: Yes. We have, at Cities Utilities, we have an economic development department. We certainly are plugged in with them and promote the connectivity. The fact of the matter is, broadband connectivity in a community is a utility. I happen to think it best fits in the municipal utility because the business customers they talk to, they go, "Hey, look. I want it to be priced fairly and I want it to be like that light switch. When I walk up to it, I never wonder if I'm going to flip it up and the lights are not going to go on. I have that expectation. That, you've just described a utility service. When you can communicate to future possible businesses that are looking at different areas of community or if you can communicate to your existing businesses and go, "That is exactly precisely what we're talking about. It's priced fairly and it's a utility-graded service." Man, that's all we know how to do. I don't have different ... I don't have silver, gold, and plastic electric service. You get the same engineering expertise. You get the same expectation for services, regardless of what size a customer you are.

Christopher: Right. I've actually been saying that. I don't pay my electricity provider based on the number of light bulbs I expect to use. I don't pay so that I can run my ... I don't pay one tier so I can run a dishwasher and a second tier so I can run a dryer.

Todd: Exactly. That bodes very well with whichever, whoever, your market is. That's what they like to hear. Everybody's world, it's a very connected world. I don't care if you make mufflers or paperclips, you're going to need connectivity for your business processes to communicate to your employees, to communicate to your customers. We work all the time. I like the flexibility of being able to work when I need to work and wherever I need to work. That requires me to have mobility. That requires me to have connectivity. It gets the work done when the work needs to be done. It's not the desk with the black phone and that's where you get your work done anymore. That necessitates connectivity. We've got ... Probably the best story we have, Expedia.

Christopher: Okay.

Todd: Our very first customer on our Ethernet network happened to be a little bitty company called "Travel Now." A couple of individuals here, very smart, young, entrepreneurs. They bought our service. They grew. They went public. Then, Expedia bought them. They left town. Ouch. That kind of hurt. They went to Dallas. Guess who came back? About three years ago. They were needing the kind of connectivity. They were needing 1,000 megabyte of connectivity to their new customer location. You know? I don't know if some of that history put Springfield, Missouri on the map for them to go, "Hey, you know what? Let's go there and check." The entire community came together. Large corporations, and believe me, Expedia, that's one of them. Large corporations, they have national contracts with the national carriers. First time around the block when they considered, everything was promised to them, "Yes, we'll do exactly what you need." I'm going to leave the name of the carrier out because that's not how we play the game. Fine, the deal was done. They're moving 400 jobs, at that time. "Here's our due date. We need here, here, here." Their carrier let them down. Carrier said, "I'm sorry. I'm not going to be able to get that. It's going to be 60 days out further." Expedia came back to us and said, "This is what we need. Can you do it?" "Absolutely." We did it. They haven't left. There were 400 jobs starting. There are 800 or 1,000 jobs today.

Christopher: It's amazing. We've heard that a number of times. Similar versions where a national major company will make a promise to have a service ready for a business. Whoever makes that promise, they don't know, this is the company of 30,000 people, 50,000 people. They make a promise, not knowing that on the ground, they can't deliver that promise. We see communities swooping into make good on failed promises from big carriers.

Todd: That old adage, "The chain is not any stronger than the weakest link." When you have a large corporation, or any corporation, or any business, moving into your community or expanding in your community, it doesn't matter if the connectivity failed five and a half feet outside of their building or the fiber optic link between LA and Chicago. The fact of the matter is, it's broke. Most of the time, it's the local side that is the tapered portion of the funnel. When you have municipals that are, "Yes, it takes a certain degree of aggressive." They want their ... They're committed to the community. You remove that. You give that personal touch. You're out there. We're out there talking with Expedia. Remember, we're the electric, gas and water utility. I've got news for you. That building also gets those three services from City Utilities as well. There are people relationships. The value to Springfield, Missouri is that the locally based broadband provider, is of great value to all of your businesses, not just your huge businesses. To all of them. Small entrepreneurial start-ups. Your education. Most of your higher education are looking at online. Look at the health industry. Yes, you do have your larger established businesses but, even their bandwidth needs and their connectivity and their next generation Ethernet requirements. A broadband play for a local community serves everybody very, very well. You could go, "Well, pal, that's great, but you don't serve at home. That's where ..." We locally peer as much as we can with the local cable company. When that hospital employee goes home and does some work from home, that communication back-and-forth between their home and the hospital that's here, it's peered locally. It doesn't take off and go to Chicago and then go through another router and then turn back and come ... That makes our community work.

Christopher: The whole community network movement should be grateful. You took this case all the way to the Supreme Court. The Supreme Court got it wrong, which is disappointing. It's really important that we have people that are willing to fight and to not just give up after losing in a State court or to say, "We don't want to deal with the legal challenges." From my point of view, we want to say, "Thank you", for sticking it out.

Todd: A lot of that thanks goes to Jim Bauer. That was a very tumultuous time. We got dealt some blows that didn't feel particularly well, but when you work forward, we have focus. That's where the larger providers, cable and telephone companies, share that same focus. When they roll something out, it's got to fit from sea-to-shining-sea. We're all slightly different.

Christopher: Right. I should absolutely include Jim Bauer. Jim Bauer's been an incredible ally and without him, I don't know where my work would be. I'm really glad to have you on the show and to enlighten some of our more recent community network fans as to some of the history.

Todd: Thanks for reaching out to me. I appreciate that.

Christopher: Absolutely. Thanks for coming on.

Lisa: That was Todd Murren, Director of SpringNet in Springfield, Missouri. To find out more, visit our show page on muninetworks.org or visit SpringNet directly at springnet.net. If you have comments or questions, please contact us at podcast@muninetworks.org. Our handle on Twitter is @communitynet. This show was released on September 11, 2012. Thanks again to Fit & the Conniptions for their music licensed using creating common commons. The title of this song is "Spellbound."