This is episode 175 of the Community Broadband Bits Podcast. We turn our attention back to Chattanooga as Chris interviews Coleman Keane, Danna Bailey, and Beth Johnson on the 10Gbps future and the FCC's ruling. Listen to this episode here.
Beth: We hear over and over again, "I'm never going back. I can't believe it took me this long to switch."
Lisa: Hello. This is a Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez.
Earlier this month, Chattanooga's EPB Fiber Optics announced that is was making 10 gigabit available to both residential and business customers. In episode 175 we focus on Chattanooga, not only to talk tech with director of fiber technology, Coleman Keane, but also to discuss their new fibervention marketing campaign with Beth Johnson, marketing manager. Chris also visits with Danna Bailey, VP of corporate communications, who's been a guest on the podcast before. Danna talks about the many ways the network has contributed to the community. You should know there is some detailed technical talk around the 10 gig discussion around two-thirds of the way through the interview.
Here are Chris and Beth Johnson, marketing manager; Danna Bailey, VP of Corporate Communications; and Coleman Keane, Director of Fiber Technology from Chattanooga's EPB Fiber Optics.
Chris: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell and today I'm speaking with three folks out of Chattanooga, Tennessee with EPB Fiber. Beth Johnson, the Marketing Manager for EPB, welcome to the show.
Beth: Hey, Chris. Thanks for having me.
Chris: We have Coleman Keane, director of fiber technology.
Coleman: Hi, Chris.
Chris: And Danna Bailey, VP of Corporate Communications.
Danna: Hi, Chris.
Chris: Thank you each for coming. There's so much news coming out of Chattanooga and frankly we could probably check in with you once a month but we try to spread the wealth around a little bit in terms of casting the spotlight on others. We're going to try to pack a lot of things into our short call today. I think I wanted to start by noting that I believe you've surpassed 75,000 subscribers. Danna, can you tell us how you're doing in terms of the subscriber counts?
Danna: Yeah, we're at about 76,000+ homes and businesses that we're serving with one or more EPB Fiber Optics services now. Most of those folks subscribe to two or more services. We're finding that our customers all over the market are embracing the product line. We serve a very densely populated downtown area and then a very rural county areas and we're seeing adoption rates all over the service territory.
Chris: That means, if I understand correctly, you have a market with about 160-170,000 potential subscribers so you have AT&T and Comcast are competing with you, three providers. You have about half the market so that means you're doing really well I'm guessing.
Danna: We're pretty pleased with the results and tickled that the market as a whole has embraced this product set like they have.
Chris: One of the other things we've talked about in the past, I believe, is that the number of subscribers that you would need to make this work financially. You're well beyond that at this point.
Danna: We surpasses that sometime back, yes, so at this point we feel very confident and have felt confident for the last several years that we're well on our way to making this business plan work even better than we thought it would in the first place.
Chris: I saw that it's benefiting some of the local governments as well. I think I saw a press release that EPB had contributed 19 million dollars to both Chattanooga and then other of the nearby local governments that you serve. In addition, I think all your electric rate customers are probably benefiting from the success of the fiber plant.
Danna: It's a common piece of misunderstanding that EPB doesn't pay taxes when, in fact, we are the largest tax payer in the city of Chattanooga and in Hamilton County. We don't pay taxes exactly. We pay what's called "in lieu of taxes" and we're pretty proud of the taxes we pay. We want to make a contribution to this community and we don't mind writing that check every year at all.
The benefit to the electric system is actually two-fold. We first built the fiber network to upgrade and modernize our electric power system. So the fiber network is making our power grid even more reliable than before. It's reducing the duration of power interruptions by about 50-60% on average so that's a great benefit to all of our electric power customers. On the other side of the coin, it's also providing a financial benefit to our electric power customers. Since the fiber network itself is actually and asset of our electric power business, every time one of our customers signs up with EPB Fiber Optics, they pay part of their bill, essentially, back to the electric company for the purpose of leasing, for lack of a better term, that fiber asset. Not only is the fiber network benefiting our customers on the electric power side from the reliability standpoint, it's also helping us keep from having to have rate increases as often as we would have had to before.
Chris: I think it's really impressive what you've done, although most of the things we've discussed are kind of policy geek issues. The kinds of things that we care about but may not necessarily get the blood flowing of ordinary people. But there's this campaign that you've started, and for this we're going to bring in Beth Johnson - The Fibervention Campaign - which I loved from the first video I saw. I think we just ran the next two videos so you've done at least three of them so far. It really shows people having an emotional reaction and being so excited about getting this service. Beth, tell us a little bit about the Fibervention Campaign for people who aren't familiar with it.
Beth: We're very blessed here in our service territory to have people who give us very good recommendation and word of mouth. Here in the creative department we're brainstorming ways to come up with a referral campaign on steroids to leverage the people who continually tell us, "I want my mom and dad to switch," "I'm trying to get my husband to switch. What can you do to help me get them to switch?" So we came up with an intervention of sorts and we've termed it the Fibervention, where we set up a website. If you knew someone suffering with lackluster service that you could nominate that friend or family member and I think in total we had about 175 referrals and of those we had to narrow it down to four. We surprised these people; we showed up at their doorstep after a little bit of pre-qualification. We showed up at their doorstep. We asked them if they were ready to make the switch. We had the nominator there with us and if they said "yes" we installed right then and there and awarded them with three months of free service, a Netflix subscription, some iTunes gifts and we wanted to make sure they had a great first experience with us and, of course, we filmed the whole thing, turned it into a mini reality series that currently you can see at EPBfibervention.com.
Chris: How has the response been? I'm curious how many people have been virally spreading it and that sort of thing.
Beth: I don't have the reach numbers in front of me. I can tell you that since we started airing the spots in July that we've seen about a 7% spike in sales overall and we recently launched phase two of Fibervention, which is a more standard refer-a-friend campaign, where you can, again, go the website, refer somebody and if they sign up you each get $50 off your first bill. We've had over 145 recommendations so far and a third of those have converted.
Chris: I guess I'm curious. I would expect that as you get more and more saturated as more and more people are switching over and very few people are switching away, you have to be more and more creative to reach the next swath of people. Is that sort of what this comes from? That need to get to a different part of the market?
Beth: That's right. Inertia is our worst enemy right now. They may not be happy with their service, but they're just not suffering enough to call and have somebody come out and take a day off work so Fibervention Campaign really gave us an opportunity to a) highlight some of those pain points that they may not even realize they're putting up with on a daily basis and reward our current customers to show our appreciation for them by giving them something back for their business and their referrals.
Chris: One of the things I find surprising, because I'm a subscriber to Comcast with no other real choices and I know Comcast is in your market and I seem to get hit with a bill increase every year. I guess I wonder if you have people that tend to switch more to you right after that month after they get a bill increase.
Beth: I don't have any stats to prove that but I would say yeah. How much are you willing to pay before you say, "Hey, I'm going to give these other guys a chance." We hear over and over again, "I'm never going back. I can't believe it took me this long to switch." The more customers we have the more that message is getting spread that we don't have surprise bills, we do treat our customers with the utmost respect, we're there 24/7, we'll come out for any reason. More people on the street saying that same thing so it's only helping us.
Chris: Can I ask what your favorite story of the three that have aired so far was?
Beth: Probably Ms. Martha. She was our first one. I love them all but Ms. Martha is a senior citizen and it's very difficult for senior citizens to change to something different. She was recommended by a friend of hers at her church. She loved Facebook and she was so welcoming to us. After hearing some of her stories about the price increases she had been through and the difficulties she had sitting on hold with her other provider, we felt like we were really doing her a service by helping her switch and getting her email set up and showing her how to use everything. Since then she's been one of our biggest advocates and we keep in touch with her regularly. She's a good model for other senior citizens who don't have to be treated poorly. We're looking at ways where we can maybe use Ms. Martha again because she's a huge fan of ours now.
Chris: That's great. I love those locally rooted campaigns. We've seen this in some other communities, too. The difference between how you're marketing your service and, I think, elevating the community versus what I saw one of the tactics on your Facebook page, one of your commenters suggested that one of your competitors was offering a $500 Visa card for those who switched back to them kind of thing. It's really great to see these marketing opportunities that really elevate the community, rather than just try to throw cash at people temporarily.
Beth: I think, at the end of the day, everybody wants to be treated fairly and with respect and that's what we strive for every day.
Chris: One of the things that you noted that EPB doesn't surprise the customers with a bill increase, as I've been watching your internet services, you launched at 15 megabits, all your speeds were symmetrical and the slowest you could get then was 15 megabits. You went to 30, then 50, now 100. You've gone to the highest end to offering 10 gigabits, which is what we're going to talk about next. As I recall the price has remained the same for internet service throughout all of those speed increases. That's about six years now, isn't it?
Beth: That's correct.
Chris: That's really incredible. Danna, did you have any comments around that?
Danna: As we learn how to manage our network we realized that we could offer higher speeds, we could offer faster internet and didn't need to change the pricing so when we had the opportunity to do that we just kept doing it. That's really been one of the goals from the get-go with having this network in place is making a platform available for our community to innovate and the way we see it, the more speed they have available to them, the more opportunity they have to innovate. We certainly don't dictate what they do with it. We wouldn't ever dream of such but if we can make it available, we want to and that's what we've been doing for the past six years.
Chris: Great and so we're going to talk now about the 10 gigabit service. I'm going to warn people that I want to talk with Coleman on a little bit higher technical level than we usually do and I think that'll be appreciated by our more technical audience.
Coleman, when the 10 gigabit was announced I was interested to see because I understand that one community, Salisbury, North Carolina, had announced they were doing 10 gig, although they needed a little bit more time before they can make it available city-wide because of the technological challenges. As I understand it, you're doing 10 gig but you don't have to switch out all of the technology at the end-user in order to do it. I'm curious if you can dive right in and tell us about the technology behind getting 10 gig to residents.
Coleman: Well, Chris, as you know, when we launched, we launched a GPON network, a gigabit passive optical network and we've been able to provide our customers with higher levels of service using Ethernet-based services. We've launched now, and are really excited about, is the next generation PON. What we're deploying is an NGPON2 or a TWDM PON. We're the first in the nation to launch that next generation PON network and basically gives us the capability today of doing 10 gigabit symmetrical to each customer that's in our network and it plays well with our existing GPON network so we actually can use the existing shells that we have that the OLTs, or at least the newer version of OLT, we have three generations of OLTs in our network now. Just by replacing a line card and then replacing the ONT at the side of the house so very little true work is done to actually deliver the 10 gigs to a customer. Today the ONTs are a little expensive because there's not a lot of volume as I mentioned we were the first to launch this kind of technology but over time ONT prices will come down. We saw the same thing with the GPON network when we first launched it so we're very excited to be able to provide this next generation architecture to our customers so that all these smart people in our network can figure out ways to use this bandwidth that we're making available.
Chris: Now, as I understand it, there's competing 10 gig standards basically and some of them would require that you replace - let me take a step back and just note for people - the passive optical network, a lot of times what will happen is you basically have one fiber that runs into a splitter and will serve something like in the high 20s or up to 32 customers and some of the standards for the 10 gig service, as I understand it, will require you to replace the ONT, the device at the customer's home, at each one of those 32 houses but your solution you only have to replace the one from the subscribing customer, right?
Coleman: You would change out the splitter so they would be put on a different splitter that would be dedicated to the 10 gig services so that would change but we do that whenever we launch a house we always go in there and have to assign splitters out of our LCP cabinets where we locate our splitters. That's part of the standard deployment process. You dedicate a PON port at the OLT which could serve up to 32 customers as a 10 gig capable port and then you change the ONT at the side of the house but wavelengths play well with the services so you don't have to worry about anything happening on your feeder fibers or anything else that's leading down to your services.
There are competing standards. NGPON2, the TWDM, seems to be the one that's going to be leading in the marketplace but there are some others that don't give you symmetrical capacity and then other ones that use just like wavelength dimension multiplexing but it's very expensive so that's probably a ways out before that one will be available in the marketplace.
Chris: One last question, which we run into a lot, which is this holy war between active and passive and I'm curious because I think as far as municipalities that are getting into this EPB has more highly trained engineers, people who are more familiar with this than many municipalities. Municipalities in smaller communities will often have to rely more on consultant advice. But what's your reaction when somebody says that the only way to have good future upgradeability is to have an active Ethernet type approach?
Coleman: Active Ethernet can be more expensive to run. There are use cases where it makes sense, specifically for some higher-end enterprise customers or something like that, 10 gig capacity down to a customer is pretty high bandwidth. There are some limitations on the GPON like on packet size and stuff like that but for most customers, they're not going to run into those limitations. It's really your special use customers that need an active service so I'm not saying that active doesn't have its place in the network because we run active services and will continue to do so but for the bulk of your customers, 90% of your base, a GPON system is cheaper and easier to run.
Chris: Great. Thanks for the technical explanation. I wanted to round out the show with something that I think everyone's going to be excited about, which is this big grassroots movement and, Danna, I know you and I have talked about this in the past but it seems like there's this Tennessee for Fiber group that's riding a bit of a wave as we see all kinds of enthusiasm for making sure the Tennessee state law supports local choice. What's happening in Tennessee?
Danna: Chris, I'm glad you asked about that because it's a really important issue for our neighbors and folks all across the state of Tennessee. For the last several years we've had neighboring communities contact us at EPB and ask us to bring high speed broadband to their communities. We've got folks who are just outside our service territory who might have constituents who only have access to dial-up speeds. We've heard stories about people who have to drive their kids 10 miles down the street to McDonald's to jump on the Wi-Fi so that the kids can download their homework assignments. So there's still, even though we've got the fastest internet in the world right here in Chattanooga, our neighbors are doing without. So we've had neighboring communities ask us to help them and we've certainly looked into that but what we've found is that it's not an option until there's a small change to Tennessee state law. So Tennessee state law today does not allow us or other companies like EPB and there are seven such communities in Tennessee. There are seven communities in this state that have fiber optic networks similar to ours but none of us, because of state law can expand outside of our service territory to serve these neighboring communities that so desperately need to be connected with the rest of the world and the 21st century.
In the last year or so there's been quite a bit of activity coming in many cases from the folks that live in these communities that don't have access. They're frustrated; they feel like they're being left out. We hear stories about folks, one lady told me that she was at the closing for her house and the buyer asked, "Oh by the way, who supplies your internet service?" And we she told the buyer she didn't have anything other than dial-up where she lived, the sale didn't go through. It's not just a matter of experiencing some inconvenience. They really are struggling without access to connectivity and we're encouraging them to get in touch with their legislators, we're encouraging them to let their voices be heard and we're encouraging folks in Tennessee who do have access to help stand up for those that don't.
We want to make sure that everybody in Tennessee has access to the tools and the knowledge that are available with 21st century communications technology. We're encouraging folks to get in touch with their legislators. We're expecting a bill to go in front of the Tennessee General Assembly when they go into session at the beginning of next year that would allow communities to make the choice to have EPB Fiber Optics or one of the other six communities that offer fiber services. The bill would allow us to expand and would allow our neighbors to make the choices that they need to have the connectivity that their communities need to be able to compete and thrive in the 21st century.
Chris: We know that we've just had a big victory at the FCC and I know that that's being appealed and it's hard for any utility to commit to a significant investment while there's some doubt as to what the law will end up being. Do you credit the FCC action with raising more awareness about this in Tennessee so you could change it locally?
Danna: I do think the publicity around the FCC filing and the results of that did raise the awareness throughout the state, and hopefully throughout the country, of this issue.
Chris: Oh, I definitely think so.
Danna: I also think there are folks who have been going without for so long that it's finally getting to the place where they're realizing that something has to be done so we're hearing a lot more from the folks who are actually without internet service right now than we have in years past.
Chris: From what I can tell, the grassroots surge is so great I'm hoping that it will finally force an actual vote and get of subcommittee. In the past I know the powerful lobbyists have been able to lock it up but the more attention we get on it the more we can have a hope that it will get through.
I wanted to end up with asking each of you if you can think back to seven or eight years ago I'm curious what has resulted from the fiber network that has most either inspired you or surprised you in the community in terms of how it's helped Chattanooga. And Beth, maybe I can start with you and put you on the spot if you don't mind.
Beth: I think for me, I wasn't working for EPB at the time it was launched so I was little bit outside the lines of it but as a mother I can tell you I am most excited about the opportunities that exist here in our community in the areas of STEM. My daughter loves math; she loves science and we have places here now like Tech Town where I can take her and give her resources that a lot of communities don't offer so as a parent I can say that the fiber optic network helps me be a better one.
Chris: Well that's great. Coleman, what are your thoughts?
Coleman: It's very similar to what Beth just said. Basically it's that the community has really embraced this architecture and has really leveraged it. We have a very vibrant, young entrepreneurial community here and the community is very open and accepting of that community so we're getting a young demographic that's coming and staying and that is really exciting to me.
Chris: Great and Danna, what's your reaction?
Danna: I couldn't agree more with both Beth and Coleman's sentiments. One of the things it's difficult to quantify and I don't even know if it is quantifiable but it's palpable is this community's sense of optimism and confidence. I think that having an accolade like fastest internet in the Western Hemisphere makes people feel good about where they are. It makes them feel optimistic about where they're going. So, to me it is probably more of a qualitative sentiment but I think it is very real.
Chris: Great. Well thank you so much for your time today and I think being an inspiration for so many communities. The fact that you've built such an impressive network and that you've done such an incredible job of making people aware of it. I know it's made my job easier here at the Institute for Local Self-Reliance because everyone's heard about community broadband now.
Beth: Well thanks for what you do, Chris. You do great work and we appreciate y’all's partnership.
Lisa: That was Beth Jansen, Marketing Manager; Danna Bailey, VP of Corporate Communications; and Coleman Keane, Director of Fiber Technology from Chattanooga's EPB Fiber Optics.
Follow us on Twitter. Our handle is @communitynets. If you use Facebook you can find us by searching for Community Broadband Networks. We want your ideas for the show. Email us at firstname.lastname@example.org.
Thanks to Arnie Huseby for the song "Warmed Up Shuffle" licensed through Creative Commons. And thank you for listening to episode 175 of the Community Broadband Bits podcast.