Transcript: Community Broadband Bits Episode 149

Thanks to Jeff Hoel for providing the transcript for the episode 149 of the Community Broadband Bits podcast with Monica Webb about the Wired West Rural Fiber project in Western Massachusetts. Listen to this episode here.

 

00:06:

Monica Webb:  We're losing full-time population.  We lost our congressional seat.  We're seeing educational costs go up in the region, as a result of losing that diversified population -- as a result of losing young families living here.

00:21:

Lisa Gonzalez:  Hello.  You are listening to the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance.  This is Lisa Gonzalez.

Without a doubt, rural areas in America struggle with connectivity, with the exception of those served by rural cooperatives, or those that have deployed their own municipal networks, many in small towns rely on satellite, slow DSL, and even dial-up.  Western Massachusetts is no exception.  This week, Chris talks with Monica Webb, Spokesperson and Chair of the Board of Wired West.  Wired West is a cooperative of western rural towns in Massachusetts that have banded together to improve connectivity in the region with fiber.  Monica describes the organization, its goals and struggles, and how the plan has changed over the past four years.  Take a look at their website, wiredwest.net , to learn about the communities that are members, and to get news about the project.

As a reminder, we want to encourage you to donate at muninetworks.org or ilsr.org to help us continue our work.  Every little bit helps bring this podcast to you each week.

Now, here are Chris and Monica, talking about the Wired West Cooperative.

01:33:

Chris Mitchell:  Welcome to another edition of the Community Broadband Bits Podcast.  I'm Chris Mitchell.  Today, I'm talking to Monica Webb, Chair of the Board and Spokesperson for Wired West, in rural western Massachusetts.  Welcome to the show.

01:50:

Monica:  Thanks, Chris.  Glad to be here.

01:52:

Chris:  Yes.  And it was fun to see you.  We just saw each other down in Austin, Texas, for the Broadband Communities Summit.  I think it's one of the premiere events of the year.  And I think it was inspiring for me.  I hope you enjoyed it.  Except for the air travel -- I know you had a problem with.

02:07:

Monica:  Yes.  It was a bit of a transplant and automobile getting down there.  But it's always good to go to the Broadband Communities Summit and hear what other communities are doing.  Challenges, innovation, new technologies -- everything is always great.  To get the update, and hear from all of the communities from across the U.S.

02:30:

Chris:  Was there anything from that event that you took away?  What was, like, a great moment for you, from that event?

02:36:

Monica:  I think that the most compelling part of that event for me, as it relates to Wired West, was Tom Wheeler's keynote speech.  Extremely powerful.  He really "gets it."  He truly understands what needs to be done to gig-ify America.  And he understands even how this needs to be executed.  I think my favorite quote from him was when he said, we need to embrace the American idea of communities banding together to solve their own problems collaboratively.  Which is, you know, ultimately the ethos of Wired West, and why these small rural communities formed a municipal cooperative, because the private sector hadn't -- didn't want to serve us, hadn't served us, under their business models would never serve us.  So, we had to take it upon ourselves to solve the problem.  And we spent the last four years doing intensive research into the financing, into the modeling, into policy, and all of the market considerations -- the pricing, the packaging.  We've done studies, etc.  Everything we need to launch a complex telecommunications initiative, and bring products to market that will ultimately serve our communities' needs.

04:00:

Chris:  And it's worth noting that there was a contingent of AT&T folks in the back.  And I don't think they had the same reaction to that point as you did -- and I did, certainly.  So, unfortunately, not the ENTIRE room agreed with him.  But I thought it was a great moment.

04:17:

Monica:  I did note that there were some folks, when the rest of us gave him a standing ovation, that didn't stand up.  But, ultimately, that's because the municipal network model really serves the needs of every other business sector aside from private-sector telecom.  And it -- you know, it becomes a challenge for them.  You know, they have to step up their game to be competitive.  And they have enjoyed this quasi-monopoly status for so long, and they have not put the kind of capital investments into their infrastructure for so long, that need to be done, for the wealth of every other industry, for the well-being of our citizens.  So, you know, I can see that having municipal networks engaged and enabled is a threat to some of the private-sector participants.

05:10:

Chris:  Yeah.  I absolutely agree.  You know, I feel like we don't need to have Rockefeller's approval of Teddy Roosevelt to tell us that he was a good President in many ways, right?

So, anyway, I want to get our conversation back to Wired West.  And you actually did a good job of introducing some of the spirit behind it.  But for people who aren't familiar, you know, what is the territory like in western Massachusetts?

05:35:

Monica:  A lot of people are really surprised to learn that in the state of Massachusetts, which is not a large state, that we, too, suffer from a lack of universal, affordable, high-capacity broadband.  So, it's basically the left-hand side of the state, shall we say.  And in the more rural towns.  So, not the larger cities.  We've been bypassed by the cable companies.  So there is -- you know there is no cable available.  We have pockets of DSL, or perhaps LTE, or, in some cases, fixed wireless for certain pockets of people.  Which doesn't meet the long-term economic development needs of the region.  Doesn't meet the needs from a social welfare standpoint.  So there are, in fact, 45 towns in western Massachusetts that have no cable service, that are in need of some kind of broadband solution.  Wired West has -- of those 45 towns -- about 35 of them are members of the Wild West Cooperative.  We formed in 2011.  It was a solution that was created by the towns, for the towns, you know, to solve our common problems.  And leverage the leadership, expertise, influence, and ultimately the economies of scale of all of our small towns acting together.

So, fortunately for us, in the Commonwealth of Massachusetts, there was legislation that was initially introduced in the early twentieth century to enable towns that had a similar challenge -- faced a similar challenge -- with the lack of critical infrastructure, when they couldn't get electricity to all towns, or at least to premises in rural towns.

07:27:

Chris:  And, actually, let me just note that I was just reading a book -- and I may have -- I may be confusing this -- because I read too many things simultaneously -- but wasn't it -- you had a wealthy industrialist in the Berkshires that brought electrification to his villa, at least.  And then I suppose that the surrounding areas were pretty frustrated that they did not have it.

07:47:

Monica:  Right.  And a lot of people don't realize that the transformer -- you know, the concept of the transformer -- was actually invented right here in the Berkshires by William Stanley in my neighboring town, Great Barrington.  That was where the first demonstration of electricity via streetlights was seen.  So, it is -- we do have a legacy of entrepreneurship here.  And that spirit is still here.  But, as you know -- you know as well as anyone that's involved in this issue -- that having adequate bandwidth really drives innovation and can attract innovation to your region.

So, that really -- we're an area that is a little over two hours from both New York and Boston.   We have great things to offer anyone who'd want to live here, in terms of scenery, in terms of quality of life, in terms of the culture.  But we're missing the access to high-quality telecommunications infrastructure throughout the region.  You know, there are pockets in the region that have cable.  But we really need to step up our game if we want to provide the kind of job opportunities, to have diverse population here.  We want to provide the kind of education and healthcare that we here believe our citizens deserve.

09:11:

Chris:  And one of the things that I really like about Wired West is that you have a policy of not leaving anyone behind.  You know, people from other areas, not familiar with the Commonwealth, may be confused.  But "towns" are more like -- well, I think of them more like tiny counties.  I mean, you just -- the towns comprise all of Massachusetts.  There's no area of Massachusetts that's not in a "town."  If I'm correct.

09:36:

Monica:  Right.  Then did largely eliminate county government years ago.  So, each town really governs its own municipality itself.  And, certainly, the towns that are members of Wild West are small towns.  Some of them are as small as 200 households.  And these towns could not take on, themselves -- you know, say, what Leverett did, to create their own fiber network.  They just don't have the resources.  They don't have the local championing necessary to plan and execute this kind of thing, and do it in a way that serves everyone.  So that's one of the other benefits of us having this cooperative, is, we have the access to expertise and multiple towns together.  I look at our leadership team, and we've got people from, you know, all over the region.  We've got a financial expert from the town of Cummington.  We've got a legal expert from the town of Washington.  We have a technology expert from the town of Peru.  So, bringing all of these -- you know, various expertise from the various towns together was an important strength for us working together as a cooperative.  And then, you know, when we move forward as a cooperative, we are NOT going to leave anyone behind.  We are -- our intention is to provide service to every premise that requests it.

10:55:

Chris:  It's been four years, then, since you've established Wired West.  And I'm always curious, in an effort like this, you know, how do you keep your spirits up?  And, you know, what's changed over those four years?

11:07:

Monica:  Well, what primarily changed is, initially, we were looking at financing the entire cost ourselves.  So, we looked at the various financing options out there.  And, you know, it just became clear that it was going to be a real challenge to finance the entire cost of the network ourselves.  And about two years ago, it was proposed by the Duval Patrick administration, with some additional monies to go towards last-mile.  And that, really -- when you applied that, which will be about 35 percent of the cost of these fiber networks -- fiber networks in our towns -- it really made a huge difference to the financial modeling.  It did also mean that we had to somewhat go back to the drawing board in terms of the modeling, to determine a model that worked for both the state and for the town.  Not only did we both agree to the modeling, and the assumptions of the modeling, but also how that would be executed.  So, there has been a lot of new planning that has transpired, as a result of the state coming forward with some seed money for these projects.

12:21:

Chris:  Let's come back to that in a second.  But let me just ask you, is it different in 2015 to not have high-quality Internet access than it was in 2012?  Or is one of those things where you're kind of like -- it sucked then and it sucks now -- it's no big difference?  What's it like?

12:37:

Monica:  That's a really key point.  Because I think, initially, when we started this, we -- you know, people were inconvenienced by the lack of broadband.  But it was really the early adopters among the towns that were banging the drum and saying, listen, we've got to do this; we've got to move forward; fiber is the infrastructure of the future; we have to make this happen.  And what has really happened over the last two years is -- you know, first of all, in our region, we've seen Leverett say, you know, we're going to finance this entire thing ourselves, and we're going to move forward and do it.  So towns just said, oh, wow, you know, there are municipalities -- even in our region -- that are willing to move forward on this and make it happen.  And, secondly, our towns have really started to see the evidence of -- you know, in a negative way -- of not having broadband.  We're losing full-time population.  We lost our congressional seat.  We're seeing educational costs go up in the region, as a result of losing that diversified population -- as a result of losing young families living here.  We have seen people, you know, not get jobs, because either companies are moving out of the region or they don't have sufficient ability to telecommute.  And we've even seen people unable to sell their homes, because folks come -- when they come and they look at a house here, they say, don't even show us a house that doesn't have broadband.  And they use to say, you know, broadband; now they're saying, don't even show us a house in a town that doesn't have cable.  So not only are they opting out of homes in our region that don't have DSL.  They're now opting out of homes with DSL.  So they're opting out of entire towns in the region.  So our towns are really now understanding, this is critical to move forward.  It's going to take time to build -- to finance, to plan, and to build.  And we're already suffering now.  So it really is urgent that towns make this happen.  The sooner the better.

14:42:

Chris:  So, I want to turn back to the financing issue now.  And I think it's worth noting.  I'll admit that, for years, I've been on bit of a hobby horse, of trying to get people to understand that if you build middle-mile, it doesn't necessarily result in last-mile networks.  Because the cost-prohibitive nature of last-mile networks is the capital cost.  And having a good middle-mile network doesn't really change that factor.  Although middle-mile can be essential for having a good business plan if you can afford the capital costs.

So, when the Massachusetts Broadband Institute proposed to build this ring around the state, you know, I was a bit suspicious that it would NOT result in a lot of last-mile development.  And I have to give the state a lot of credit, because, as you noted, they built the middle-mile network.  And I think that's doing a wonderful job of serving some of the schools and the libraries and people -- the entities that really needed service that didn't have it.  But now they've come back, and they're writing a check, to try and help solve the last-mile problem in some of these areas.

So, let's pick back up with that.  And, can you just step back and describe how this works?  Are the cities going to put up some money?  The state's going to put up some money?  How's that envisioned right now?

15:59:

Monica:  Yeah.  Well, I will say that, you know, the financial model is fairly complex and has been crafted with the assistance of national and international consultants that were brought on by the Mass Broadband Institute, which is the entity that built the middle-mile, and is coming up with some of the last-mile funding.  As well as our own experts at Wired West.  And some additional sort of vetting that's happening with local CFOs and specialists in the technology area.  So the financial modeling is relatively complex, essentially from a financing standpoint.  The MBI has about $40 million that they're going to allocate to solving the last mile.  It's been separated into two pots, one that will go towards regional costs.  So, things like the engineering for all the towns, the project management for all the towns, of the construction.  And then a second pot that will go to -- that is allocated to each individual town.  And I'll leave the allocation process out of it, because it gets a little complex.  But, essentially, the way that they're allocating the money means that they're putting up somewhere around 35 percent of the cost.  Which is over a third of the cost.  So, it really is important to the town to recognize that that's a significant subsidy.  That is the town's being able to own and operate long-term, multi-generational infrastructure, with a third of -- discount on the cost.  So, the towns will be putting up the rest.  And that will be raised through general obligation bonds that are authorized town-by-town, because that's how financing is done here.  And the financing -- you know, the way that we finance things in small towns, whether it be, you know, a dog park, a fire truck, or a fiber network, is through property taxes.  What we are doing with Wired West that is perhaps different from other models -- and, you know, Chris, you and I may differ on this particular point -- Wired West is going to endeavor -- when we can cover all of our operational costs out of revenues, to return "excess" revenues to the towns, to cover their debt service.  So, that's not going to happen immediately.  Our projections are showing that that will happen, you know, in years 5 or 6.  But that's a much easier political sell to the towns -- to say this, ideally, will not impact your tax base, i.e., raising taxes, for the entire length of the bond.  The 20 years of the bond.  It will -- the monies for debt service will eventually be covered out of revenues from Wired West.

18:59:

Chris:  Well, I think that makes a lot of sense.  What would the alternative be?

19:03:

Monica:  The alternative would be, you know, how Leverett has looked at this, which is, they said, we think this is important enough that we're just going to cover it via property taxes for the duration of the bond.  And we're not going to model it so that we're expecting revenues to cover the debt service.

19:22:

Chris:  Right.  I think that -- well, it's one of those things about the Institute for Local Self-Reliance is, we celebrate the ability of towns to make those decisions for themselves.  And, you know, we don't insist that the towns do any specific thing.  So, I think it's just great to see these towns finding a solution that works.  Because at the end of the day, I may have a bunch of theories, but we want to have Internet in towns regardless of what I think.  [laughs]

19:47:

Monica:  Right.  Right.  Well, I will say that you have been so incredibly supportive, and an important resource for all of these municipalities -- not only Wired West municipalities but all over the country -- municipalities that are considering this and, you know, initially don't really understand where to start.  I always direct them to muninetworks.org .  It's a great place to find reports and get a feel for why this is so important and how communities can start going about making that happen.

20:20:

Chris:  Well, I deeply appreciate that.  And I'll say, similarly, that I think a lot of communities have looked at what you're doing out there, in terms of Wired West.  And I think, you know, Monica, you've -- you're one of a number of people that have given so much time and effort -- volunteered it -- to this effort, that it's always worth celebrating -- this sort of -- I mean, this makes things happen.  This is what makes history happen, the way I see it.  And it's not so much getting paid to do it, but going above and beyond, to make sure communities benefit.

But one of the things that you've really touched on -- you've harped on, I'd say -- in a good way -- is that there needs to be community engagement.  And I'm wondering, you know, if you look at places like -- there's some places where municipal fiber networks have been built without a lot of community engagement.  And it's worked in some places.  But in other places, I think we've seen a lack of community engagement that's hurt.  So, from your perspective, why is community engagement important?

21:17:

Monica:  Community engagement is really important, because communities need to own their own success.  So, you know, I'll use my town.  You know, you go on the town's website and they're supporting the Wired West network.  You go into town and there are signs supporting Wired West on the town marquee.  You know, local establishments have put up signs.  People are calling their neighbors, making sure that they have signed up for service, and are supporting the build-out.  It really requires local investment.  Not just financial.  It requires local investment.  People need to realize, this is their network -- this is OUR network.  And, for it to succeed, we have to own it and support it.  And I think when an outside entity comes in and says we're going to build this network -- particularly in our towns, that have been so marginalized by the private-sector phone companies, who have no interest of -- you know, to serve everyone, or even the folks they're already serving, in a way that is in any way robust.  So, people really need to own it in order for it to be successful.

But what was really interesting to me was, about a year ago, attending a workshop at the FCC.  There were various panel discussions.  And the participants on the panel were public- and private-sector telecommunications firms.  They were -- and municipal networks.  As well as state and federal agencies.  And the overwhelming message that came through was that local and -- this is from all entities -- local engagement is critical to the success of local networks.  So this is something that I've seen evidence of myself.  You know, I've seen how proud everybody is in Chattanooga.  How proud everyone is in Lafayette.  How proud everyone is in the town of Leverett.  That they've made this happen themselves.  And that their citizens and their businesses and their institutions have access to the best Internet that the world has to offer.  And that's why -- you know, that's why they were successful in bringing that to market.  And here at Wired West, we believe exactly the same, that it's really important to have local investment -- financially and otherwise -- in order to ensure the success of a gigabit network.

23:59:

Chris:  And I think I would take that a little bit farther, to say that MY hope would be that as we see communities come together in that way, that they're taking ownership of other issues.  Right?  And I suspect that this is what you'd see as well.  That any other issue that comes down the pike, they're ready.  And they're ready to engage in local government.  And it's basically to make government better.  Because government with disinterested citizens -- well, it's not democratic.

24:26:

Monica:  Right.  Right.  And, you know, I'll go back to Tom Wheeler.  I mean, he was the one who cited the fact that, you know, for towns, this is really an American tradition, of -- you know, the communities solving their problems collaboratively.  You know, this is why the statute that we're using in Massachusetts is actually -- you know, as I mentioned -- over a hundred years old.  And it came into play because towns couldn't get electric service.  The private-sector electric companies didn't want to build it.  And so, we're -- and telecommunications was added in the mid '90s.  So, we're, actually, interestingly, using a statute that was implemented for the same reason, so that local communities could empower themselves, and take charge of their own futures.  And the prospects offered for electric service.  And now we're looking at the same situation -- almost identically -- where towns don't have access to the next critical infrastructure -- telecommunications infrastructure.  And they are taking it on themselves, using that same statute, to build out these networks for the future of their communities.

25:36:

Chris:  Well, as we end this show, is there any final thoughts you'd like to share with us?

25:40:

Monica:  I think one thing that's really important, as communities consider this, is, there's not really a one-size-fits-all model, in terms of how to successfully deploy this.  The one thing that is universal is -- as we've just been talking about -- local engagement.  But, you know, it -- some towns have a municipal utility, which is a great benefit.  Some don't.  Some are greenfields; they're are starting from scratch.  Some are small rural towns.  Some are suburban.  And some are urban municipalities.  And that, you know, impacts the kind of model.  And it also impacts your access to financing.  You may have local stakeholders -- economic development agencies, state agencies -- that are interested and willing to support the initial planning, and even subsidize the build-out.  So, I think what's really important is, when municipalities approach this, is to really do the research.  Start with -- I always -- as I said, always go to muninetworks.org .  Read some of those reports.  CTC Technology [sic] also has some great reports on their website as well.  Read those reports, and find out, you know, what's being done, what can be done.  Look for case studies for relevant -- that are -- can be compared -- that are relevant to your municipality.  But, overall, don't lose sight of the fact that this is incredibly important for the future of our quality-of-life, and our businesses in America, to have access, universally, to this kind of gigabit infrastructure.  And, you know, I look forward to -- hopefully, in 40 years, looking back, and seeing it as ubiquitously deployed as electric and telephone infrastructure are today.

27:25:

Chris:  Yeah.  And I hope we don't have to wait too long to look back at that time.  [laughs]

27:31:

Chris:  You know, it would be really nice if, in 10 years, we think, wow, we're really glad we finally got everyone to have quality Internet access.

27:38:

Monica:  Right.  Very true.

27:40:

Chris:  So, thank you for coming on the show.

27:42:

Monica:  Thank you for having me.

27:43:

Lisa:  Send us your ideas for the show.  E-mail us at podcast@muninetworks.org .  You can follow us on Twitter.  We are @communitynets .  We also have a Facebook page.  Go there and like us.  Thank you to Persson for the song, "Blues walk," licensed through Creative Commons.  And thank you for listening.  Have a great day.

 

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