Thanks to Jeff Hoel for providing the transcript for Episode 159 of the Community Broadband Bits podcast with Dave Spencer from NoaNet, the Northwest Open Access Network. Listen to this episode here.
Dave Spencer: Trying to lead by finding ways to meet the need, in order to fulfill our mission, which is to bring broadband into these rural areas that, frankly, have been passed by.
Lisa Gonzalez: Hello. This is the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. I'm Lisa Gonzalez.
Since 2000, NoaNet has served Washington state with its open access wholesale fiber network. To date, the network consists of almost 2,000 miles, in both metro and rural areas. This week, Chris interviews Dave Spencer, Chief Operating Officer for NoaNet. Among other topics, Dave gives us the history of NoaNet, discusses their business model, and describes the many ways the network has enhanced life in rural Washington.
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Now, here are Chris and Dave Spencer.
Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. And today I'm interviewing Dave Spencer, the Chief Operating Officer of NoaNet. Welcome to the show.
Dave Spencer: Thanks, Chris. Pleasure to be here.
Chris: So, Dave, we're talking about NoaNet, which is located in Washington. And it seems to be most of Washington state, in fact. Why don't you tell us what "Noa" stands for, and what you do.
Dave: NoaNet stands for Northwest Open Access Network. We were formed back in 2000, in response to the dot-com and telecom boom passing us by, in rural areas of Washington. We're formed by the municipal corporations' public utility districts that were running utilities in rural towns in Washington state. And we're eyewitnesses -- have ringside seats -- at getting passed by on the digital divide here. And decided to do something about it.
So we, you know, created NoaNet to hook up various digital islands, if you will, out there in these rural communities and backhaul them to major metropolitan Internet hubs.
Chris: And it's interesting that you have open access in your name. I think you were right at the forefront of open access, around 2000 now. What does open access mean, in the context of NoaNet?
Dave: Open access, for us, was a realization that if we build rural infrastructure, that we needed to allow other people to use it, you know, by design. So, in other words, we didn't have any illusions that the cost of capital build-outs in rural areas could possibly prevent -- if we went in and did it -- could possibly prevent others from investing, just because of the, you know, severely high cost of building broadband in rural areas. And so, then, if we were going to do that, that we'd want to open it up to all comers, for a variety of broadband applications, whether they're focused on communities specifically, healthcare, education, carrier exchange networks, cell phones, any of the kind of activity. And that this would just be sort of the off-ramp from the Information Super Highway, as it was called back then.
Chris: Right. I still like that term, actually. It's a little bit retro, but I still think it's pretty accurate.
Chris: So, you've had fifteen years. How far does the network extend now?
Dave: We originally had extended the network through the middle part of the state, and over to the eastern edge. And also back on the, -- you know, Seattle is predominant Internet hub. But also, Portland and the city of Spokane are considered Internet hubs in the Northwest here. The network has since expanded to have add-drop sites in every county of the state. So, it's truly a statewide effort. And as a nonprofit municipal corporation, if you will, we provide that open access, then, to all these particular sites around the state. And often in a redundant way. So if there's a failure in one part of the network, it self-heals, and keeps those services up. So, at this point, it's throughout the state, and available for economic development, healthcare, what have you.
Chris: Just so, I think, people have a sense of maybe where some of the credit might be due, how much was the federal stimulus helpful, in helping you to expand to every county?
Dave: If not for the federal stimulus, we would not have expanded. And I doubt anybody else would have. So it was a significant program, that landed right in our wheelhouse. As I mentioned, we had a network, originally ** run of about 1,800 miles -- route-miles. And had hit, you know, I would say, maybe two-thirds of the counties -- half the counties. When the stimulus program came out, and the Broadband Technology Opportunities Program, BTOP -- administered though NTIA -- we looked at that and said, shoot, you know, this is right in our wheelhouse. And there are huge swaths of Washington state that are not served. Or are underserved. And so we put in proposals -- we actually won two grants, both in the first round and second round, to essentially build out fiber into these areas and create looped infrastructure that would allow for redundancy. And so, the stimulus funds were huge for us. It allowed us to expand our network into every county, and add 1,200 miles to the network.
Chris: I sometimes think that -- I wish that pretty much every state -- or, you know, maybe in some areas, regions of states -- had an organization like NoaNet that would have been available, rather than just sort of passing that money through to the local corporations, or the big national corporations. Because, I think, you have that commitment to open access that a lot of others don't. And when you're putting federal money into something in these rural areas, for all the reasons you said, it's really great to have it be open access.
Dave: Definitely! And it's open access to those carriers you're referencing. Certainly a benefit to them. And benefits the incumbent telecommunication entities. I think what we've found with that is that -- and, prob- -- maybe even more importantly -- it allows us to aggregate demand. So if you think about it, there's liable to be a cell tower or two in a rural area that, as the broadband tide continues to come in -- and nobody is saying that the demand for broadband is going down; if anything, it's accelerating -- that a lot of these communities, you know, were stuck with, you know, inferior cell service. You know. There may not be coverage, or, certainly, for data service, who was not keeping up with demand. Yet, you think about it, a lot of these rural communities can't get on the major carriers' radar, to upgrade. But having a regional network that is open access, and is focused for all comers, private and public alike, then allows these cell towers to be aggregated, and, you know, actually put the state of Washington on the map, and help attract investment. And so, now, some of these areas have coverage that, really, they couldn't have dreamed about five years ago.
Chris: Well, you've already listed some of the different uses of your network, in terms of the healthcare, and the economic development, and connecting the schools, and things like that. Is there -- are there -- anybody -- is anyone using the network that's surprising? You know, is there something that you just -- you love to talk about, regarding how your network has benefited the state, in ways the people might not expect?
Dave: Well, that's a good question. There are a number of stories. We've done some interviews out there on economic development. And, you know, I would say that what's surprising is the number of people that are putting up businesses in the rural areas that, you know, normally, they would have had to have gone somewhere else. Maybe they grew up in a small town, and now they've got world-class broadband access, and they're forming their digital media companies, their next-generation application development companies in these rural areas. And kind of the best of both worlds, you know. A lot of outdoor recreation, yet, you know, they have the ability to really promote their products and services on a global stage.
Chris: Right. And I think -- and then, on the other end, you have the data centers, for some of the more established companies, as well, often want to be located in your state because you have access to low-cost power, the climate in a lot of the state is conducive to it. You know, I assume data centers must be a big part of your business.
Dave: Well, certainly, back in 2006, it was a major part of our business. And it was back then that we were "discovered," if you will, on the global map of great places to site data centers. And, at the time, you know, no one had already had fiber into these rural areas. And all of a sudden, these rural areas became attractive for, as you mentioned, power, land, and then broadband. So, it was sort of the hat trick there, coming together to create a fertile ground for business development opportunities on the data center front. And now, you know, fast forward nine years later, it's remarkable how many data centers are there, and how much bandwidth is flowing in and out of these, what would otherwise were fields, and, you know, an agricultural area in the center part of the state.
Chris: You know, I don't want to pick on another state, but I was just thinking. If you look at a state like, I think, West Virginia, they have not dissimilar challenges to connecting everyone. Right? They've got mountains that get in the way of connecting things. Windy roads. Very rural areas. And yet, if I had to guess, I'd say your schools, throughout Washington, are probably connected with much higher capacity networks than in a state like West Virginia -- or in many of the other states that have to deal with those beautiful mountains. You know, you connect a ton of schools, don't you?
Dave: Oh, absolutely. And, going back in time, ten years ago, you know, as NoaNet was up and running, many of our public utility districts and municipalities were looking at building to schools as a critical function for, back then, what we were calling "bridging the digital divide." And, you know, what I would call now is "digital inclusion." And PRIORITIZED getting fiber out to schools. We also had the benefit of a statewide organization that managed connectivity to schools, you know, on a statewide basis. So between, you know, NoaNet and the other last-mile fiber providers, we've been able to stitch up a network that's essentially run for ten years now, connecting every school and school administrative site to the statewide K-20 network the we have in place. And it's been a tremendous success. Of course, now, with E-Rate and some of the funding for intra-connections -- you know, schools connecting to their various campuses and communities, and getting the fiber built out there, having a statewide network in place just fuels the fire, if you will, for incredible broadband connectivity.
Chris: In Colorado, for instance, where I just was, I think, in some of these rural communities, people have to pay outrageous sums. I mean, on the order of $100 a megabit in some cases still, for Internet access to schools. I assume your prices are much more competitive than that.
Dave: Yes, they are. We've priced our network, and the retailers that use it. We're a wholesale network, so the retail ** that sell to the state and to schools have priced it comparable to what you could buy in an urban environment. Now we still have high-cost areas, and need to recover costs on that. But across the state, people are enjoying similar price-points that they'd have in the metro areas.
Chris: We've been concerned, in the past, about state-owned -- statewide -- state-owned AND statewide -- networks, because we feel like the state doesn't necessarily act with the communities' best motives in mind.
Chris: And I'm just sort of curious how you -- you're a statewide but locally-owned -- or, you know, your members ...
Chris: ... or owners are rooted in the community -- do you think you act differently than a state-owned -- statewide enterprise might?
Dave: I think in some sense you could argue that governments getting into the broadband business maybe are a little bureaucratic, may not move fast enough to meet the needs of the commercial sector. You know, those types of arguments.
Chris: Can I just -- I want to just pause you there for a second ...
Chris: ... and just say that if you're not moving very fast, and not meeting the needs of the commercial sector, you could very well be talking about the big incumbents as well.
Chris: Bureaucracy knows no public or -- bounds. It's a function of size, in my experience. But -- sorry to cut you off.
Dave: Touché. No, that makes sense. For us, we put a premium on rolling out our network in a -- in a way that allows us to rapidly adapt and respond. We have no illusions that we're in a competitive industry. That while we could, you know, open up this fantastic network to the world and say, yeah, you know, come on, let's go, that people may not show up. Right? Maybe if you build it, they won't come. Kind of attitude. And so, when we opened our doors, we were very much focused on the customer experience. Time to -- you know, minimizing time to get hooked up. Minimizing the quote process. Once we have people up and running, operating reliably. Putting a premium on reliability and responsiveness. So, I'm not sure that you could say that, you know, the government is worse at that than, let's say, the private sector. Based on your point you just made. I think it's more of an attitude. And we came in with an attitude of focusing on the customers, problem-solving, more of a solution sales approach, where we're trying to be the most flexible ones. We're trying to lead by finding ways to meet the need, or to fulfill our mission. Which is to bring broadband into these rural areas that, frankly, have been passed by.
Chris: Right. And I think I was -- because I was making it up as I was going along, my question wasn't totally clear. But, to some extent, as someone who is very much supportive of local governments -- um, and supportive of state and federal governments, but I sort of -- I think most highly of local governments -- I just sort of wonder if, you being an entity that's owned by local governments makes you respond differently to local concerns than if you were owned by the state of Washington.
Dave: Since we have investors that are concerned about the communities specifically -- their schools where they're sending their kids, the healthcare that's available, the emergency response that's available -- are we sensitive to that in these communities? And the answer is, VERY much so. And, of course, we get it. And so, when we talk to communities that are looking to get into this, and, you know, what impacts this could have them, we're very much focused on use cases. That is, case studies that are proven, that deploying broadband in specific ways IS beneficial to the community, and CAN benefit the community in ways, you know, maybe that they haven't thought of. And so, very much the -- in that sense -- it's a grassroots build-out. It came from the locals, that said, hey, we are getting passed by. And if our communities are going to have a shot at being economically viable in the future, we've got to do something about broadband access.
Chris: Right. Well, I think, as we're running out of time here, and winding the interview down, I'm curious if you have any thoughts on the future of NoaNet. You're the kind of guy that's -- you've been in this industry for a while. And I'm curious if you see it changing significantly, or if you think it's basically going to be more of the same, but on a larger scale?
Dave: For us, the future is evolving on a number of fronts. NoaNet's reinvented itself a few times over the years. We mentioned the data centers earlier. And that was a, you know, major upgrade and network technology at the time. Since BTOP, obviously, expanded the footprint. For us, now, being in every county, and being grassroots-focused, we see a compelling need for more and more broadband access. It's -- you know, these communities that -- the issue isn't going away. And so, on NoaNet's front, we're looking at focusing on getting ever-larger footprint, ever-deeper into the communities, whether it's working with a locally-inspired municipal that is doing something that needs connections to the outside world, whether it's working with the incumbent telco, the price-cap carriers that are nationwide -- you know, all hands on deck here. Grant funding. You know, federal funds coming in. Tribes. You know, as great as the success story is, there is much to do. And also with, you know, the next generation of cell phone traffic, the next generation of platform-based applications, the over-the-top movement, making sure we've got a reliable, redundant platform in place to enable all the over-the-top -- not only entertainment applications but for healthcare, for public safety -- the list goes on and on. So, I just feel -- I feel like we got a good toehold and an amazing network in this state. And there is much more left to do, to accomplish the mission and vision of NoaNet.
Chris: Great! Well, thank you for coming on, and telling us more about NoaNet.
Dave: Hey, my pleasure, Chris.
Lisa: Send us your ideas for the show. E-mail us at firstname.lastname@example.org . You can follow us on Twitter. Our handle is @communitynets. Once again, we want to thank bkfm-b-side for their song, "Raise Your Hands," licensed through Creative Commons. And thanks for listening. Have a great day.