Thanks to Jeff Hoel for providing the transcript for the episode 157 of the Community Broadband Bits podcast. Brooks Brown, Managing Partner from KC Fiber, joins us to discuss North Kansas City's municipal network. Listen to this episode here.
Brooks Brown: You know, you would call us and, essentially, for a $300 fee, we'll come out, we'll install the equipment, and then you will have gigabit capacity for the next ten years for free.
Lisa Gonzalez: Hello. This is the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. This is Lisa Gonzalez.
Would you like to have a gigabit at home for a monthly charge of ZERO dollars? Believe it or not, there's one place in the country where households can get a gigabit for free, after paying for the installation charge. North Kansas City. No, that is not a gigabit from Google Fiber. It's available from the municipal network, liNKCity, and it's partner, DataShack. How do they do it? This week, Brooks Brown, Managing Partner from KC Fiber joins Chris. KC Fiber is the organization that manages and operates liNKCity. In addition to sharing the details of this incredible deal with North Kansas City residents, Brooks provides some info on how the community came to this partnership, and more details on the network's business model. You can learn more about the network at linkcity.org and muninetworks.org . Go check it out. Now here are Brooks and Chris.
Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today I'm speaking with Brooks Brown, a Managing Partner of KC Fiber there in North Kansas City. Welcome to the show.
Brooks Brown: Well, thank you, Chris. Thanks for having me.
Chris: Well, I'm tremendously excited to talk more about this somewhat unique arrangement and -- in North Kansas City, around liNKCity. And I just -- I think it's one of those things that -- we talk to a lot of people from different communities that have fairly similar models, but you all are pretty unique. So I thought I'd start off by just asking you, you know, how it was that you came to be operating a municipal network, and -- there's a little bit of baggage with that. So I guess I'd ask you to start off by describing, you know, your background and what you're doing at KC Fiber.
Brooks: The liNKCity was the initiative of the City of North Kansas City -- oh, I think it was in 2006, 2007. Basically put a fiber optic infrastructure in the ground, because some parts of the city were not, basically, receiving muni Internet. There were certain areas that were kind of isolated by railroads -- railroad tracks and what not, so that there was actually some businesses here that really couldn't get any decent Internet. So, the city went with the idea of -- OK, we'll put this fiber in the ground, we'll be able to give these businesses access to some good Internet. And, you know, the fiber was kind of the way of the future. So -- and I actually think Black and Veach did the engineering and they hired a contractor and they put the fiber, basically, to almost every business and residence that chose to sign up for it. It was free. And so they could basically have the fiber run to the premise, whether they wanted to utilize the service or not. That's how liNKCity started.
Chris: So, that's the history of liNKCity. But, as I understand it, where you come is just a little bit different. You know, North Kansas City had built this network, and they didn't really -- they built it using this odd funding mechanism, with revenue from the casino. And I think that's an interesting story. But what I'm really interested in is how they decided to have you operate it, with some of the history of the DataShack, the hosting company. And -- you know, and how that's arranged currently.
Brooks: We have a dedicated hosting company, as our primary business. And we chose to locate in North Kansas City because we were able to get a footprint here. They've got a lot of warehouse-type buildings that are kind of prone for redevelopment. And with the fiber, we were able to pull out of 1102 Grand in downtown Kansas City, and get capacity up here for our business. So, it kind of made a natural piece for us, for growth. We were outgrowing our space downtown, in Kansas City. And so we bought a building up here, and, in essence, redeveloped it. And this is where we operate our dedicated hosting business now.
Chris: And so, you -- one of the things I got from reading the background is that you guys looked at this as an opportunity to, I think, to give back to the community, to some extent. I mean, the city needed someone that would be a better operator of the network. And you felt that you could do that. And you wanted to do it.
Brooks: We went into partnership with liNKCity prior to getting into the agreement to operate and maintain. And we donated a gigabit of bandwidth to the North Kansas City School District. And we basically used the fiber infrastructure from our facility, and handed it off to the school district. Which, in turn, they were able to basically touch every school in the district. North Kansas City's kind of a small four-mile square area. But a lot of the schools in the school district itself are in -- actually in Kansas City North. So we, basically, through that donation of the gigabit to the schools, we basically were able to impact about 19,000 students and staff.
Chris: And that's something that, just for -- I think some people might be interested in -- is, when you say you gave a gigabit to the school, what that means, I think, is that, you know, the school doesn't have to pay for the Internet access on a gigabit. Before, they might have not had that much, because they couldn't afford it. Now -- I think, did they already have the fiber physically connecting the schools?
Brooks: They did. They had the fiber connecting the schools. But, you know, they were trying to, basically, run the district on a 250-meg MOREnet connection.
Chris: Yeah, that's not going to do it.
Brooks: Yeah, when we lit that gigabit, they ran up to about 800 meg immediately. And then, basically, since then, a kind of an update to that, is, they upgraded their network to a 10-gig network, rather than just the gig network. And we're currently feeding them about -- a little less than 2 gigs of bandwidth now.
Chris: And that's -- so that, basically -- if understand the arrangement correctly -- right? -- you would be delivering the 10 gig to one location, and then they're spreading that all around their whole district. So each building can share in that. Is that right?
Brooks: Yes. Yes. And basically we don't just hit the one building. We hand off to them, and then they're able to hit every school. Every high school, middle school, and elementary school. Which enabled them to add, I think, additionally, about 6,000 pieces of hardware this past year, since they did their upgrade. So, now every high school student has a laptop. Every middle school student has a laptop. And I think the ratio at the elementary level is a laptop for every three or four students.
Chris: OK. So, I think, to recap a little bit then, you ended up, now, operating the network. The city of North Kansas City continues to own the network, but you have a 10-year license, basically, or a contract, to operate the network, both to connect residents and businesses.
Chris: One of the things that I just find amazing is that you've decided to go with a one-time charge to get access, rather than an ongoing monthly charge, which is pretty common in the industry. So, if I'm a resident, tell me how I get hooked up to your network.
Brooks: You know, you would call us and, essentially, for a $300 fee, we'll come out, we'll install the equipment, and then you will have gigabit capacity for the next ten years for free.
Chris: And so, I don't have to pay you anything. I don't have to rent any modems, I don't have to -- I don't have to anything. I just have this great connection.
Chris: Well, how do the economics of that work out? I mean, that's just not something we see anywhere else.
Brooks: Well, North Kansas City is somewhat unique, in the sense that the residential -- the number of residential customers down here is small in comparison to the business side. They have a small residential footprint, where most of their business is the commercial side. And our hope, in that sense, was, OK, well, with the free gigabit service, that would also help stimulate the residential economy down here in North Kansas City.
Chris: Well, I'll bet! I really hope that it does. You know, it's amazing that you have this somewhat unique arrangement in Kansas City, where people can have access to the Google gig. And now, just north of their, in an area that Google is not planning on building out, now you're delivering even a better deal.
Brooks: Well, we think so. [laughs] And we hope, you know, that, again, with the impact -- kind of like in the schools -- that we'll be able to see an impact down there in the residential areas.
Chris: Right. And now, you have -- North Kansas City had hundreds of commercial subscribers -- businesses that were in North Kansas City, that's right?
Brooks: Yeah. Yes.
Chris: And so, you're growing that footprint. But can you give us a sense of what kind of pricing might be ordinary for a business in your area?
Brooks: You know, we go down to a two-meg package for $39.95, up to a gig, at $499.95.
Chris: Yeah. A commercial gig at $500, that's still pretty competitive. I mean, most places don't even public their gig rates.
Brooks: Right, And that -- you know, and we do a symmetrical bandwidth. We don't -- Right now, the essential -- for about 10 megs, 20 megs is probably what gets used the most. And, again, that's symmetrical bandwidth.
Brooks: And we have found a lot of, you know, our engineering, architecture, those types of firms, they have a gig with us. And, you know, they -- they're just one of those businesses that push a lot of tiles out, you know.
Chris: Well, one of the things that I was curious about is how -- you know, in all the discussions over peering arrangements, for instance, between Netflix and Comcast, or Netflix and Verizon, we learned a lot about how, when you're peering, and you're trading traffic, it's -- the agreements tend to work best when they're roughly symmetrical. And so, as a hosting company, I'm sure you have to peer with a lot of companies. And you're really pushing a lot of data out to them. Now that you're also operating the residential and business services, it's pulling some back in. And so I'm wondering if that just -- if there's a natural symmetry there for businesses that are data hosting to be ISPs as well?
Brooks: Well, it definitely helps -- it helps us balance our network, with our peering, you know. And it is a -- it's something we've got more traffic pushed out of our data center, and -- than we have coming in. So, you know, it does balance it.
Chris: And so, would you say that that's something that's unique? I mean, if there was a different company, that was not in the hosting business, that is trying to copy this arrangement of -- a free gigabit to the schools, a free -- you know, a one-time cost gigabit for residents. And it's affordable pricing for the businesses. Do you think that that's something that anyone can do? Or is it something that you have a unique advantage, because of the data-hosting background?
Brooks: I think it does give us an advantage, in that sense. Because we already are using a tremendous amount of bandwidth, that already is a part of our cost structure. On the liNKCity customer, for instance, is coming in, where we're pushing that. It is an advantage for, you know, a hosting company to be in that position rather than somebody just going out and trying to create it, I think.
Chris: Um hum. Well, I want to finish up with a thought, here, which is that I think it's somewhat unique, your partnership with North Kansas City, in that -- you know, North Kansas City, the network had not broken even and was running at a loss. Now you're running it, and it seems that you've got some novel ideas. But you're sharing the benefit -- the profits -- with the city as they move forward. And you've also taken liability away from the city, in terms of future losses, to a large extent. You want to maybe walk us through that a little bit?
Brooks: You know, yeah, that was one of the -- when the city put out an RFP. And one of their things was to sell the network. And the other was to look for someone to come in and operate and maintain. And I think, you know, the advantage for the city is, it's still -- you know, we basically -- it's kind of like the Lamborghini. They had a great fiber infrastructure in the grand. There just wasn't a lot of gasoline getting to it.
Chris: [laughs] OK.
Brooks: So, you know, with that bandwidth -- with the capacity added to the network, you know, we -- the public library here, for instance, we also have set up on a gig. You know. All the city offices are on a gig. You know, there's a lot of advantage to the capacity in the network that just wasn't there before, because, you know, the city didn't have any reason to buy all of that bandwidth, just to turn around and give it away and lose more money. You know, you have the fiber in the ground, but you don't have a lot of bandwidth to deliver these things -- these various services. And, you know, what do people do with a gigabit? Well, I think that's still in the early stages of people discovering, OK, this is what I can do with it. The school district's probably been the greatest impact, because, you know, now, they're basically doing ALL their testing online, where two years ago, that wasn't even possible for them.
Chris: Right. And are you seeing any new businesses coming into the area because of this deal?
Brooks: You know, we have. And we've seen some redevelopment because of it. And, again, mainly, at this point, from, like, larger engineering companies. You know, one comes to mind where, again, they redeveloped a kind of older-type warehouse and made offices. And the city is -- you know, the city of North Kansas City, aside from just having the fiber in the ground and all, is a great area in the context of, we're literally right across the river from downtown Kansas City. So location is -- it's a great location, as well.
Chris: Excellent. Is there anything else that we should know about North Kansas City, before we end the interview?
Brooks: A gigabit piece, and the fiber in the ground, I'm kind of hopeful to see what that means to this, from an economic development standpoint, in the next five years. It will be interesting.
Chris: Excellent. Well, we'll be checking in with you, to keep our finger on the pulse of liNKCity.
Brooks: That sounds great, Chris. I appreciate your having me today.
Chris: All right. Thank you so much.
Lisa: Don't forget to e-mail us at firstname.lastname@example.org with your ideas for the show. Follow us on Twitter. Our handle is @communitynets . If you're a Facebook user, go to Community Broadband Networks, and like our page. Thank you again to bkfm-b-side for their song, "Raise Your Hands," licensed through Creative Commons. And thank you for listening.