Transcript: Community Broadband Bits Episode 16

This is Episode 16 of the Community Broadband Bits Podcast. JD Lester and Larry Gates of Chanute, Kansas describe how the gigabit network contributes to the economy and the quality of life. Listen to this episode here.

Lisa Gonzales: Hello and welcome to episode 16 of the Community Broadband Bits Podcast. This is Lisa Gonzales with the Institute for Local Self-Reliance where our research contributes to our website muninetworks.org. In our sixteenth episode, Christopher Mitchell interviews JD Lester and Larry Gates of Chanute, Kansas. We just released an in depth report on the incredible municipal network in Chanute and how the community developed this gigabit network without any borrowing or bonding.

Lester, the City Manager, and Gates, the Director of Utilities, join Christopher to talk about how the network contributes to the economy and the quality of life. They discuss their future plans for this incredible asset. 

Here are Christopher, JD, and Larry.

Chris Mitchell: This is Chris Mitchell. I'm on the line with the City Manager of Chanute, JD Lester, and the Director of Utilities, Larry Gates. 

Thank you both for joining me on this Community Broadband Bits Podcast. 

Larry Gates: Our Pleasure.

Chris Mitchell: I'm very excited. We're talking on the day that we're releasing a case study looking at how Chanute has been able to build a very impressive wired and wireless network. I thought we could start by describing Chanute to people who haven't been there. What is it like on the ground?

Larry Gates: Chanute is a rural community in Southeast Kansas. If, like many communities west of the Mississippi's Railroad Town. In fact, the way that the name Chanute came about is there were four different townships that were vying for the railroad depot that was being designed by Octave Chanute and he convinced those townships to merge together. They named the town after him, and then well you go. Octave Chanute conceptual design all was used for the Right brothers flyer. It's a quaint town in Southeast Kansas. A population of about nine thousand. A lot of friendly people. The community of Chanute is a full service community, and by that I mean we own an electric system, a town power generation, we own a natural gas system, water waste water and of course the fiber optics network that we're talking about here. It's kind of in the central part of the Southeast Kansas so we like to call it the hub of Southeast Kansas. 

It has struggled the last couple of decades with the decline in manufacturing, but we are in a process of making a comeback and deploying some of the technologies that we're going to talk about in this interview is one strategy that we have in order to accomplish that.

Chris Mitchell: The network is fascinating that you've built. We devoted a number of pages and we spent a lot of time getting into it, so I know there's a lot that can be said about it, but I'm wondering if you can give us a brief overview of what you've done in Chanute to build this network. How you've gone about it. 

Larry Gates: You know, we've operated a fiber optics network since about 1984, and we used it basically for our substations and our generating facilities that were in three different locations within our community. When we did an expansion on our generation in '02, we built that fiber network, and when we did we really used 144 fibers as a backbone connecting those facilities. In certain locations we put splice boxes in thinking that we could maybe utilize this in the future. In 2005 was when we made that a reality and we started connecting the schools and the colleges up to our network, offering services at that point in time. We've grown into this network as well as our customers did. As the internet becomes more popular at the schools and the educational facilities, we've had to ever increase our bandwidth and so by doing such, we've expanded out to level three. They have a regen station here. It's in our electric service territory, so we ran fiber optic there and connected to them and now we have a gig of internet that we're bringing into our community.

We've connected several businesses to it. We believe that it wasn't the deciding factor but it was a factor for bringing a new business into our community here recently that's going to create probably 125 jobs over the next two or three years. 

We have a lot of other interests in our community because of our network and I think that we're seeing more and more of that every day. We're getting a lot of hits because of our network. They like that gig of internet. 

JD Lester: We're really seeing it being transpired from more channels on TV and certainly the internet faster is really an essential utility going forward. That was really part of the mindset as we began to expand the network out. We thought it was still going to be just as important as electric was a hundred years ago for economic development.

Chris Mitchell: As you were describing the gig that you have, it suddenly dawned on me a question that I didn't have written down that needs to be discussed. That's when I get internet from my cable provider, they advertise it as up to speeds. What you were doing down there is the opposite of that. I was hoping you could explain briefly your approach to provisioning broadband for your customers.

Larry Gates: It's not a sealing anymore, it's a floor. They're guaranteed whatever they're purchasing at any given time. After that they can pretty much verse to whatever is available on our network.

JD Lester: Our strategy was when it came to pricing is price something at where they're going to be at a certain level where they're going to consistently use that, but above and beyond that it's all you can eat because we're paying for the monthly connection and the bandwidth anyway, you might as well take what you can. 

Chris Mitchell: Right. I just think it's a really terrific approach. I hope that we see more communities considering it, but the idea of guaranteeing, basically, that your customers will get this speed and then allowing them to use whatever slack usages in the pipe. It's terrific because it allows them a lot of benefit without having to pay a lot more for it and so it seems like an everybody wins situation for the community. 

Larry Gates: Funny thing about having the level three pop present close to us and being connecting to them with fiber is we don't have to end at a gig. Their capacity is much greater than just a gig. With the phone call we can go to ten gig and with some more electronics they can just continue to go up. I think we can long term accommodate just about any need that's out there. 

Chris Mitchell: The network seems to have benefited from a real focus on identifying any opportunity to expand it over the years. I'm wondering if you attribute that to anything? Has their been a person or a document that's responsible for just making sure that every opportunity you have to expand your network, you've taken advantage of?

JD Lester: I think it's a byproduct of just good business practices. Any time that we can see that we can use these technologies for multiple purposes, we want to be able to leverage that. From public safety to banking or utility infrastructure, to education. We just had a inquiry from a hospital who's going to electronic medical technology where people can actually view online, I'm assuming, X-rays, and PET scans, and CAT scans, and they're requesting 100 BM worth of broadband. Just any opportunity you can to leverage it, we want to do. In fact, we're talking right now, and with our WIMAX system we don't just have to be focused on the community of Chanute, but the greater community. It's entirely possibly that the library system in Southeast Kansas can connect other libraries besides our own by using our WIMAX system and our fiber network and bandwidth. 

Chris Mitchell: Let's talk a little bit about the wireless system. You've had some licenses available to you to build this 4G WIMAX network. Why don't you tell us, though, who's using it and what it's capacity is?

JD Lester: That was interesting because we found out that there was ... All of our school districts were issued this spectrum and it wasn't being used, it wasn't being billed out, and it was all going to be lost. The SCC was going to take it back and so we work with our school districts and was able to obtain these licenses, start building out a WIMAX network, the 4G WIMAX network. 

We have a few businesses we've been doing some beta testing on that at this point in time and seeing what the bandwidth capabilities are. I think people are having twenty five, and about ten is the speeds that they're looking at this point in time. I don't know. The radios that we installed are 100 MB radios and we have four of those up in our communities. 

There's sure some other possibilities that we can use this for as we move to maybe look at Smart Grid within our community because we have water, electric, and gas meters, and we're looking at an automated meter information system to accommodate those utilities also. WIMAX may be a possibility that we use that.

Chris Mitchell: You provided us with an excellent map that shows the coverage of the network. It's quite a bit substantial. It's quite a bit outside of town as well as I believe JD mentioned in the comments about it, which I believe is pretty interesting benefiting those who may live just outside of town in addition to those who live in town.

JD Lester: We were able to secure four different licenses. One from the community college and three from school districts and based upon each channel, we were able to daisy chain those together and create more bandwidth than one alone could have done.

Chris Mitchell: You said you have a couple of business clients. I'm wondering if we can go back in time a little bit to when you hooked up your first business client and if you can describe the situation as to why that was necessary and the reaction of the business to being hooked into your network.

Larry Gates: I'm guessing it's the same route as several of our customers even on our fiber network as well as this WIMAX that they connected them to is because they were having issues with broadband. Either couldn't get the SL at their facilities or was having another service provider and the quality of service was not there. They were losing their internet connections to just not being able to get much bandwidth to send the packets that they were needing to send. We were able to connect these folks and they have been very happy with the results of getting over onto the City's network. I think we're highly reliable anywhere we strive to be there with that. 

JD Lester: Either having an electric utility mindset, we build a lot of redundancy into our infrastructure.

Chris Mitchell: Well as you said earlier, and I don't know if maybe people missed it, but you provide all the infrastructure in town it sounds like.

JD Lester: Yeah. Pretty much.

Chris Mitchell: Yeah. So it would make sense that you certainly know how to provision reliable services. 

JD Lester: Yep. All the poles and right away's to be able to work with them which simplifies things quite a bit for our provider.

Chris Mitchell: You, I believe, are beginning to plan, or you have been planning the ability to expand your network out to touch every household and business when the financials make it feasible. Can you tell us a little bit about what you'll expect ... What the benefits will be of expanding your network out to everyone?

JD Lester: I think we see maybe potential benefits. What our objective is and I know that some communities have done this successfully and others not so successfully, but what we envision is to build out a network that it's an open access type network. In other words, we don't necessarily want to be the retail provider of a voice service or video service or things of that sort. What we'd rather do is just transport IP packets, similar to the way that we might buy electric kilowatts from another generator and then transport that to the home. We see this as a very similar function. We could see having those connections being used for utility purposes, for our purposes, and then maybe market the excess bandwidth to companies that want to provide retail services over our network.

Chris Mitchell: It would be fair to say then that although, at the present time, you are providing retail services to a few customers that are external to the City and the schools, but in the long term you see your role as more infrastructure based and not focused on services?

JD Lester: Yeah. I see us maybe as a wholesaler or bandwidth for those connections.

Chris Mitchell: That's the path for open access, it seems to be making the most sense. We're seeing that work out pretty well in Danville, Virginia and a couple of other places. We certainly hope that that works out because that's the only chance we really have in this country of having robust competition, I think. We'll be thrilled to watch you trail blaze and hope that other communities are able to follow. 

JD Lester: We don't see it any different than building streets and bridges and letting anybody drive down them if they want.

Chris Mitchell: As the utilities you're serving the water, the gas, and the electric. Presumably, there's even more benefit to you than if you were only doing electric smart meters, right?

JD Lester: Yes. Correct.

Chris Mitchell: Just out of curiosity, can you go into that a little bit just because a lot of people associate the Smart Grid with just being about remote meter reading. Do you see additional benefits beyond that?

Larry Gates: We had just completed a phase one study of implementing a Smart Grid and smart metering network. One of the major items in there as far as cost recovery is as you begin to understand your loads and your infrastructure better from electrical point of view, you can begin to size the infrastructure properly. In other words, you may have transformers out in your system that are really larger than what they need to be to meet the need and the demand. If you can right side those and maybe instead of losing five percent of your energy you're losing two percent. 

There are substantial savings just by being more efficient on the energy side within the electric utility. Same with water and natural gas and by being able to take that data and provide that to the in-consumer, I think they can become better consumers. I think that the way we have it set up now is they consume the utilities and ten days after that they get a bill and send the payment in and they really don't know what they're consuming and they don't have the chance to respond quick during situations where it's more expensive or less expensive. 

Other things you will be able to see and such would be able to determine that. We're going to be able to offer a lot more services such as prepay where they can prepay their bills. The customer information system is what JD was talking about is just a wealth of information that the customer could have in his hand to where he could see what he's consuming or using. Of course, as we all are here in the Midwest, at this point in time, in a drought, this would be a huge tool for us to use at this point in time and also our consumers. Just to see how they are doing in conserving water that they're using.

Chris Mitchell: Is there anything else about the network that our viewers should understand before we sign off and encourage them to read the report?

JD Lester: It's a fun tool to have. I've mentioned economic development, but I do think that that's going to be a critical infrastructure for just about any business. Even with manufacturing businesses, they are so interconnected with their suppliers and their customers now that they've got to have that continual connection and bandwidth with them in order to manage inventories and control production. I don't think it's a fad. I think it's a long term way of life when it comes to business. We think we're positioned very well to satisfy those needs as they come along. 

Larry Gates: One of the benefits I think we have for business that we didn't discuss much of is if there's a business in our community that has more than one location, they're able to actually write to servers at gig speeds, so they can not have servers in two locations, they can do it in one. They could better manage their assets at a length. That has been something that has been very well liked in our community.

Chris Mitchell: Oh, I'm sure. The cost in my community of hooking of two offices across town with a gigabit is prohibitive. Is that something that ... Do you charge extra for? Is that something that just comes with having two connections to the internet through you?

Larry Gates: We have a connectivity fee of $250 at this point in time.

JD Lester: Per location.

Larry Gates: Per location. Other than that, once they get on the bandwidth there's no floor.

Chris Mitchell: That's incredible. Just for clarification, the $250 connectivity fee gets them unlimited communication between those two sites and then there's an extra fee depending on what they want to access from the internet, is that right?

Larry Gates: That's correct.

Chris Mitchell: That's just ... $250 is nothing compared to what most of the communities in this country have to pay to do something like that. It's a heck of a deal. We would expect nothing less from a community that has a motto of tradition of innovation, I suppose. 

Let's hope that some other communities can pick up on it and learn from your lessons.

Larry Gates: Let us keep our competitive advantage for a little while.

Chris Mitchell: Right. 

Larry Gates: I think it would be very good for communities to get serious about this kind of infrastructure because I think it's going to be critical.

Chris Mitchell: Yes. I absolutely agree, although I think you're thinking far enough down the road that it will be hard for many communities to just up and surpass you. Congratulations. Thank you so much for sharing all the information with us on the report and on this podcast. It's been terrific learning about Chanute.

Larry Gates: Again, that's our pleasure. Thank you.

Lisa Gonzales: That was Christopher talking with JD Lester and Larry Gates from Chanute, Kansas. You can learn more about Chanute's journey to the gigabit network in our report. Download it an muninetworks.org or at ilsr.org. The case study is also available in kindle format. If you have any questions or comments email us at podcast@muninetworks.org. Our handle on twitter is @communitynets. 

This show was released on October 9th, 2012. Thanks to Fit and the Conniptions for the music licensed using creative commons. The song is called Spellbound.