Transcript: Community Broadband Bits Episode 191

This is the transcript for Episode 191 of the Community Broadband Bits Podcast. Huntsville, Alabama, recently announced the deployment of Dark Fiber on which Google will offer services. Stacy Cantrell, Vice-President of Engineering at Huntsville Utilities, and Tom Reiman, President of the Broadband Group, join the show to explain how this came about and what the next steps are. Listen to this episode here.

 

Stacy Cantrell: I hope utilities can recognize that it's within their means to do this. We can put up this infrastructure. We can maintain this infrastructure and we maintain it 24/7, that's what we do.

Lisa Gonzalez: Welcome to episode 191 of the Community Broadband Bits podcast from the Institute for Local Self Reliance. I'm Lisa Gonzalez. You've probably heard the big announcement coming out of Huntsville, Alabama. After several years of exploring possibilities, Huntsville Utilities announced that they will be deploying dark fiber. Google Fiber intends to offer fiber to the home services via the network. The provider will not have an exclusive contract with the city, meaning the network will encourage competition and the city will continue to own and maintain the infrastructure. In this interview, Chris talks with Stacy Cantrell, vice president of engineering for Huntsville Utilities and Tom Reiman, president of the Broadband Group. The Broadband group has worked with Huntsville Utilities for several years as they developed the plan to improve local connectivity. The arrangement between the city and Google Fiber, one in which a large internationally recognized provider agrees to use publicly owned resources to bring retail services to an entire community, has the potential to open the door for other communities.

For municipalities that feel offering lit services is still too much of a risk, or in places with state barriers, the Huntsville model is worth watching. Now here are Stacy Cantrell from Huntsville Utilities and Tom Reiman, from the Broadband Group.

Chris Mitchell: Welcome to another edition of the community broadband bits podcast. I'm Chris Mitchell and today I'm speaking with Tom Reiman, president of the Broadband Group. Welcome to the show.

Tom Reiman: Thank you, glad to be here.

Chris Mitchell: And we're also joined by Stacy Cantrell, vice president of engineering for Huntsville Utilities. Welcome to the show.

Stacy Cantrell: Thanks Chris, glad to be part of it.

Chris Mitchell: Well, you two have had quite a week. We're going to talk about it in a little bit more depth than most people have heard yet. I think people are going to be really excited to learn more about what's happening down there in Alabama. To be very clear on this, Huntsville, Alabama. There are other Huntsvilles. Let's start by learning a little bit more about Huntsville Stacy. Can you tell us a little bit about it?

Stacy Cantrell: Huntsville is a great city. We're a great size but we're not too big. You've got everything here from craft beer, we've got Redstone Arsenal, we're right on the Tennessee River, we've got companies like Toyota, we're full of engineers. We were ranked one of the top engineering cities in the U.S. so there's a lot going on here. It's a great place for people to live and work.

Chris Mitchell: What does Huntsville Utilities do?

Stacy Cantrell: Huntsville Utilities is a public utility provider. We are an electric distributor for TVA. We also provide gas and water and we've been a utility here for 75 years.

Chris Mitchell: Tom, can you tell us a little bit about the Broadband Group and how you fit into this?

Tom Reiman: One, we're very grateful and appreciative of the opportunity to fit into it and you're right, it's been an exciting week for us. The Broadband Group has been incorporated for just over 20 years. The part that I think is an interesting connection, in the mid-1980's, I was actually a partner with Southern Bell and Bell South on the world's first fiber to the home project. I always tried to stay abreast of innovative changes and opportunities in the industry. Over the last 20 plus years, we have represented cities, municipalities, utilities and large scale master planned communities throughout North America, Disney Celebration and Mission Vale and Forest City but I think nothing equals what we have done working together at Huntsville in our utility and our announcement this week. We really try to be innovative thinkers, game changers, we try to move industries at a pace and into a position they may not move on their own. We do business, financial, regulatory and operational planning for those entities I just mentioned

Chris Mitchell: Thank you. I wanted to just interject a moment as well there. You were working with Google. Google, whenever I've spoken with them, have tended to want it to be off the record and I wanted to have a conversation with the two of you to get a better sense of what Huntsville's doing because I think Google's participation really helped to make this a big national news event but fundamentally, other cities are going to be looking to try and do this and that would all be happening independent of Google. If anyone's wondering how we could be talking about Huntsville without talking to anyone from Google, that's why. Let's dig into a little bit more of the original goal and why did Huntsville originally start thinking that you had to do something as a utility in the communications space, Stacy?

Stacy Cantrell: If you go back, say 15 years ago, I think we installed our first fiber line to one of the water plants just to have better communications with our water plant and for SCADA and from there it just continued to grow. We got to a point where we realized we really need to put some strategy behind this fiber network and our relationship with the Broadband Group started around that time. It's been over 2 years now that we've been talking with the Broadband Group about how do we build out this system, you know, we've got facilities all over our service area, all over the city, all over Madison County really. We need a real plan for how we're going to get Fiber to all those facilities. We started talking to them over a couple of years ago.

Chris Mitchell: And Tom, I'm curious what you remember from the early days of starting to work on this project?

Tom Reiman: Well let me first mention a comment that you made, which is I think the foundational element of this entire process and that is, the utility, long before any company, whether it be Google or anybody else, emerged as a potential user of our fiber infrastructure and I'm going to say our throughout this discussion because I am so close to the utility and we really are partners in this process but the utility recognized that it's future was tied to fiber connectivity for things such as distribution automation and substation control and SCADA and other operational requirements. The move to a fiber infrastructure was well underway and inevitable. Utilities have to compete and the information future of a utility is almost as important as the distribution of its commodity services. The utility said, "Wait a minute, if we are going to do this anyway, let's determine what physical assets we have." That was our first time we began working together and Stacy was actually mid-2013 and you're right, in terms of the time frame but Huntsville, we contacted each other and began working together to really understand what infrastructure was already in place, how functional was the fiber?

Many utilities install fiber but don't necessarily have a solid design and engineering behind how that fiber's going to be utilized outside of their direct requirements. We spent the better part of a year inside the utility supporting Stacy and her team at looking at existing fiber, looking at the routes, looking at the integrity and the capacity of that fiber, looking at points of interconnection, determining it's viability because the leadership of Huntsville Utilities recognized that not only required that infrastructure for it's services but knew there might be an opportunity to explore what I would consider alternative or enhanced uses of that. That was phase 1. I think Stacy, I think you may concur, that really launched this entire effort.

Stacy Cantrell: It really did. We just needed to find a way to almost blanket our system to reach all the places that we saw that we were going to need fiber connectivity. Tom mentioned distribution automation, we're launching an AMI program.

Chris Mitchell: For our listeners, that's meter reading kind of stuff, right?

Stacy Cantrell: Yes, and it's more than meter reading, it's intelligent metering but yes, remote meter reading. Fiber supports all of these things that we want to do and things that we haven't even thought of that we're going to need to do in the future.

Chris Mitchell: I'm curious, and I don't know who might be best poised to answer this but was it always a given that the utility would have such a strong role or was there a thought that if Google wanted to build it's own fiber network or another company wanted to build their own fiber network, would that have been as good of a solution from the sort of problem you were trying to solve 2-3 years ago?

Tom Reiman: Almost 3 years ago, in fact it was quite a bit longer than that, Tommy Battle stood up and said, "I want to be a connect city and I want to ensure that the delivery and availability of next generation broadband not only enhances how we live but how we interconnect." I think the mayor, who has been a major part of this initiative all along, not only recognized connectivity but knew that regional economic development and the city's economic development was tied to it's ability to connect businesses and residents. The mission then was how is that accomplished? You're talking to individuals from the utility but the city began almost at that same point, and issued an RFP. I think it was a document that was sent into the public marketplace to determine if anyone might be interested in supporting the next generation information needs of the city, be it the utility or the city itself. That's how we came together in terms of this process, that numerous companies, and Chris, you know this, these RFPs are floated in many, many municipalities throughout North America without any clear direction or understanding as to where they're going to go and who's going to respond.

One of those responders was Google Fiber, the company that we announced earlier this week. Along that process, and Stacy, I'll turn this one to you, before we made the determination as to who to select, there was this internal discussion and planning as to whether or not the utility might provide the fiber services, perhaps they would deliver fiber to the home or fiber to the business. We felt it was critically important to look at every option. The metrics of those options, the economics of those options, and quite honestly, we found that whether it was operational readiness or financial or whatever it may be, the utility was best designed to do what it does historically, and that's provide transport. We transport electric and gas, why can't we continue down that path of historical competency and deliver dark fiber services to support the services provided by others. It's really a key foundational element of this entire process that we at some point, you know, the exact date, I'm sure Stacy and I don't even recall, we recognized that our future was in dark fiber and making sure that we could find capacity for others.

Chris Mitchell: One of the things that we've seen is over 2,000 cities that have their own municipal electric utility, Huntsville is definitely toward the bigger end of that but I'd say more than half of them have decided that this market is something they don't want to get into. I'm really curious and I think it's exemplary for Huntsville to take such a strong position and I've very excited for the results because I think it's going to be far better than many other cities. I'm just really curious if there is any sort of doubt or concern as you were pursuing that path.

Stacy Cantrell: We had a lot of concerns and doubts that we discussed but really it's a natural extension of what we already do. We install and maintain infrastructure. There's no reason we can't install fiber, whether it's on poles or in conduit and we had proven that over this last 15 years. I think we had come to that realization from the time we did that first small fiber job to where now we're installing 48 count, 96 count fiber, that we can install fiber. Now there's fiber out there available to lease, or dark fiber available to lease so it's a very natural thing for us to install this infrastructure and we've become very comfortable with that.

Chris Mitchell: One of the things that I want to turn to is some of the financing and Tom, I'm curious if you can share with us some of the expected costs and how the utility plans to be structuring, how it will pay for it.

Tom Reiman: We did a comprehensive financial analysis of what the cost of overall fiber deployment might be. I think the public number that has been issued today both by the mayor and by the general press, this is probably a 50-60 million dollar deployment. What will be incorrect is to assume that the burden of that cost falls totally to the transport of broadband services. The beauty of the model and you might agree, the road of municipal broadband is checkered at best over the last 20 years. One must always look at the financial stability of any of these initiatives.

Chris Mitchell: We've always admitted that there is certainly a number of cities that have struggled with it but the checkered at best, I would have said checkered at worst, myself. I certainly think the majority of cities have had the benefits they were looking for.

Tom Reiman: Well, I think I take your exception and agree with it. What we did is we looked long and hard at what is a unique business model that still has allowed a city to control the information destiny of it's businesses and residents but does it in a way that's economically and financially viable. That's where we came across this opportunity that said exactly what Stacy just said. We are not good at providing cable television services, providing hosted services, customer care. We're very, very good at deploying fiber. If we can build on that and use that core competency and then bring a service provider who is willing to allow their services to ride on that infrastructure, that becomes a success point and a metric that we are pleased to see others ... and  even in the 4 days since this announcement has been made, we're seeing cities rise up and say this is an option that we had not explored before. This is an alternative in terms of both financing as well as service delivery. We think we have, I don't know if we've cracked the code but we've certainly opened up an opportunity that has not existed prior to this announcement.

Chris Mitchell: I think you were going to note that not all of the costs would be paid by the broadband services. Can you just tell us a little bit more about that?

Stacy Cantrell: This goes back to the original reason that we contacted Tom and the Broadband Group was we recognized that we were going to have a need for a widespread fiber network, that we needed that as Huntsville Utilities so we were discussing how to do that. This would have been a very, very long build out. Then when Google entered the picture, it gives us a reason and somewhat of a means to speed that up. There are a lot of benefits hat we'll get, operational benefits that will help pay for this that we get by installing this fiber.

Chris Mitchell: One of the things that we've seen in Chattanooga, which is another municipal electric utility that has done this is they have had so much savings, they would argue that their electrical rates are lower. They've been able to avoid rate increases because they have the fiber network. Is that the sort of benefit you're looking for?

Stacy Cantrell: We're certainly looking for that. I'm not going to say that we're at that point yet but we do see a lot of operational need that could require additional personnel or additional plant. Having the fiber network helps us to minimize those things.

Chris Mitchell: I wanted to ask just another question, Stacy, because you have engineering in your title, this is where we're going to get a little bit more technical I hope for some of our listeners who have been dying for these sorts of details. Where is the hand-off between the utility and the service provider? Google is certainly one and presumably there might be others as well.

Stacy Cantrell: We will install a dark fiber distribution network and along that route, there will be points, equipment, MST's, multiservice terminals that will belong to Huntsville utilities and that will be the hand-off point. Google, basically when they want to connect to a customer, they'll go out, run a service line and connect to that MST.

Chris Mitchell: What kind of distances are we talking about? It that kind of like on every block or I'm wondering how much cost an ISP might be expected to incur doing that.

Stacy Cantrell: The MST's will serve 6-8 homes so probably more than one a block. Distances, we're just trying to get close enough so that the tenant can run a service drop from the MST to a home. They may go down a couple of lots or across the street but we're getting them fairly close access to a home so that they can come in and do their service drops within whatever time frame they need to commit to their customer.

Chris Mitchell: I'm sort of imagining, I know in some of the alleys of areas that have fiber optic networks, you can see opti-taps up on the poles where you just plug in a fiber. Is that the sort of thing that we'll be seeing?

Stacy Cantrell: That's exactly the sort of thing, yes.

Tom Reiman: The beauty of a sophisticated network is often in it's simplicity. This is a 32-split PON network. There is very basic, and it's interesting in the way which we designed and engineered it, it's not only a 32-split architecture but it's upgradeable to 64 split. I know you don't like to get too technical but this uses a standard distribution architecture that we envision not only Google, and you made a very key point but this network is available to other service providers. This is not an exclusive arrangement. We have built into the infrastructure the capacity to transport multiple services but I just want to repeat, it's a simple yet very advanced architecture that we're very comfortable meets the needs both today and going forward.

Chris Mitchell: No, I'm very glad you went in there because I think some of our listeners are dying for me to be more technical or to ask more technical questions at times. Can you share at all the experience you had? I'm curious, did you develop this network in house? Did you go back and forth some with Google? Can you tell me anything about that process?

Tom Reiman: Yeah, this was pretty much an in-house Huntsville designed network. We took input from anyone that was willing to give it to us. Our engineering team spent a significant amount of time working in direct ... ours being the Broadband Group's with the Huntsville engineering team. We really tried to design it so we fully understood and took advantage of the in-house capacity and capabilities of the utility. Google did step forward and we have talked with them and we took input from them and others to make certain that we had the ability and the capacity to transport, whether it was theirs or anyone else's signal.

Chris Mitchell: I'm curious, my understanding is you're going to go past every premise in the city, is that right?

Stacy Cantrell: That's right, that's the goal.

Chris Mitchell: Does Huntsville, much like a number of other municipal electric utilities, have territories outside of the city limits? I don't know, is that true of Huntsville?

Stacy Cantrell: The City of Huntsville actually extends outside of the Huntsville Utilities boundaries so our area is confined to whatever is part of Huntsville Utilities service area and also within the city of Huntsville city limits.

Chris Mitchell: Those are the sort of A-B comparisons that I think economists are going to love to see how it might impact development over the time, although I understand that both Comcast and AT&T have suggested they'll be investing more so I hope that no one will be left out.

Tom Reiman: We love to spur innovation and it's really important to us being both the utility and the city, if this is the spur for more innovative investment and infrastructure, everybody wins. The current arrangement with Google Fiber, however, is just with the city. They will be securing a franchise for that but we, the utility, have plans to extend this at some point, we don't have a date yet, to the entire serving footprint of the utility, which includes Madison County and as you mentioned at the start of your question, yes, indeed the utility has a larger footprint than just the city limits and we'll address that going forward in the future.

Chris Mitchell: Thanks. The political boundaries can be pretty complicated, especially considering that the way you design these networks doesn't necessarily make sense to stick to only the political boundaries. What would another firm have to do, and I'm sure you've gotten a couple of calls already, to be able to lease connectivity?

Stacy Cantrell: Obviously they would have to contact us and they would need a franchise with the city if they didn't already have one. We would negotiate agreement with them, very similar to what we have with Google.

Tom Reiman: They would need a franchise if they were delivering any of your video services but very soon, the city, or the utility rather, or the board, will be publishing a rate card which really lays out specifically high volume, low volume pricing, both for access to our fiber ring as well as the access portion of the network. Yeah, then knowing what they wanted to deliver, in what areas of the city, the rate card will address that specifically.

Chris Mitchell: Great. Now Stacy, I'm curious. I'd like to come back to you because I know that Tom's been living in Huntsville, working on this project effectively but it is actually your community. One of the things I'd like to ask is if you think ahead 5 or 10 years into the future, how will you know that this worked, that it was successful?

Stacy Cantrell: In the future, if we're able to support any of the services that Huntsville Utilities has need for and like I said, I know things are going to come up that we haven't even thought of yet so if we're able to support everything that comes up, if we're able to support future tenants that are interested in a similar agreement, then I'm going to say this is successful. If the community if getting fiber service, if they're getting their high-speed internet, if businesses are getting better network access, then that's successful.

Chris Mitchell: Tom, do you have any sort of expectations for what you might be looking for after you've built this model and a number of other communities?

Tom Reiman: You know, if this in fact is a model that other cities can benefit where either they were underserved or want to extend and expand the capacity of broadband quality in their communities, this is one that I think all of North America should look at. You need to look at success in two ways, I think of it this way. You never lose sight of the economics. We had to make certain that the network's overall economics and the return on capital and return on investment, we had a path. We had a path that we could ensure the risk factors in so many municipal broadband endeavors and exercises, we would not hit those troubling points but we thought about what we have to deliver in terms of financial metrics.

The next one is what Stacy just mentioned. If I can, I mean the utility, can improve the quality of life or quality of services, the information on which utility lies, educational support and distribution of health care capacity, have advanced the regional economic development future of what Tommy Battle asked for. Mayor Battle said, "I want to be a connected city of high class and high quality." We think that that's something the rest of this country should look at. It will not work everywhere, Chris. I mean in other areas, there's existing broadband investment that is quite capable of delivering on the mission that we have defined for Huntsville in the areas where there is still need and lack of high bandwidth services, this is a very important announcement that occurred last Monday that we think other cities could emulate.

Chris Mitchell: I'm curious, when you think about other cities, if this model would work in a city that does not have a municipal  electric utility or doesn't have a way of trying to get benefits from others, aside from end users.

Tom Reiman: You know, we haven't fully explored that because obviously we have been zeroed in and focused on this particular endeavor and this particular opportunity. The efficiency of the city owned utility is something that we have relied on and we believe is a great foundational thinking and planning for next generation. Are there other operational saving metrics that another city could deploy? I'm really focused on this one because the utility has very, very strong advantages it can bring to bring new services to a city, whether it's through the ownership of poles or existing fiber infrastructure, or we're already operationally ready through the utility. There may be, but I think it would be very, very well served to look at this model in terms of it's very specific metrics, see if other cities could duplicate the effort.

Chris Mitchell: Is there anything that we haven't covered that you think we should definitely include before we conclude?

Tom Reiman: There are a lot of unknowns in terms of the upsides and the opportunities, this investment and this dark fiber relationship with Google fiber. I think what we haven't covered is what we don't know yet so there's nothing lacking to me in this particular podcast but I believe that going forward as we deploy this network, as we watch Google Fiber deliver it's services over the network, as we see the enhanced opportunity and availability for the utility itself to become significantly more efficient, over time I think those unknowns are very healthy and we expect them to be exciting because Stacy's right, there are products and services we have not yet thought of. I think we've done a relatively good job of building in enough capacity to make sure we meet those needs as they emerge.

Chris Mitchell: Great. And Stacy?

Stacy Cantrell: When we started the call, you said it's been an exciting week and it certainly has but it's really been an exciting year that we've been working on this. It does take some work but I hope that other communities out there that are like Huntsville and like Huntsville Utilities, recognize that it's worth the effort. When you look at the potential that we have to build this infrastructure that Huntsville Utilities needs to provide better service to our customers for electric, gas and water, and then also be able to provide service to the community, to the businesses, like Tom mentioned, the education system, all the public entities, everybody wins here and it's well worth some effort and I hope utilities can recognize that it's within their means to do this. We recognize that we can put up a fiber network. We can put up this infrastructure, we can maintain this infrastructure and we maintain it 24/7, that's what we do. Why not do it with fiber also?

Chris Mitchell: I should have asked this question earlier but as you were wrapping up, Stacy, which I think is terrific advice that I really hope other communities take, I realized you had mentioned the meter reading and I wanted to make sure that we were clear. Will you be using a wireless product to basically ... for home users to be using the various services you deliver, to deliver that to the network? Is that how that will work?

Stacy Cantrell: The meter will be a wireless radio device but we'll have a fiber backcall network that we use to get all that information back to our building.

Chris Mitchell: Right, I'm sorry. That's what I was trying to describe. In the past, I've heard that the water readers aren't that great but presumably they'll be coming on, will you be able to do remote meter reading and all the advanced smart-grid things that are being developed, all the automation with all 3 of the utilities?

Stacy Cantrell: Yes, that's the plan. Right now the focus is on electric but we hope to expand that to gas and water pretty quickly. Initially, it's just basic services. We want to read the meter and get the bills out correctly and then we'll start to expand with being able to provide our customers with portals to look at their consumption, alerts possibly if they want to set up alerts for consumption limit, prepay on their bill, that sort of thing. There's just a whole suite of things we can offer once we have the basic system in place.

Chris Mitchell: Great. I just had a child and I'm already imagining the arguments over water usage and things like that so I can see where those would come in handy. Tom, what additional thought did you have that we wanted to make sure we would include?

Tom Reiman: Blair Levin, from the Brookings Institute, who I think is as good a barometer in North America as anybody about these announcements really mean and if you look at the Brookings Institute comment to this announcement, that it is not only a fundamental shift in ideas and options but it really enhances the marketplace. It doesn't displace, it enhances. It gives options to cities and utilities and broadband service providers that were not evident before Monday at 2 when this announcement was made. We're very pleased that individuals like Blair and others have endorsed and looked at what we have accomplished in Huntsville as something very significantly important for this country.

Chris Mitchell: Great. For the people who are not technical, you can consider this the end of this show but for the half of my audience that is more technical, I think half of them were very excited when they heard you were using a PON approach and another half were saying, "Oh, man, they should have gone active. It's just terrible that they chose PON." I would just like to briefly push in on that for a minute or 2 to get a sense of why you chose the architecture that you did.

Tom Reiman: It was the most efficient for the existing architecture and the building on of it. What we did in Huntsville is not go into the debate as to whether or not it should be active or PON, but said based on the existing infrastructure, the back office, the BSS, the OSS, on the technical side, the single most efficient way in which we could deploy this network, because we knew we were transporting foreign signals. I mean that by someone else, that we had to have this neutral architecture where we can deliver not only for the company that eventually became Google, but somebody else, the PON architecture worked for this city. Every city is unique and every city is different in terms of its capacity to deliver these types of services.

Chris Mitchell: Thank you so much for coming on. This has been a terrific discussion. I think this is going to be one of our most popular podcasts because I agree, absolutely with Blair Levin, I think this is going to lead to a lot more innovation and I want to thank you both for working so hard on advancing broadband and the internet access of the United States. Thank you for coming on the show.

Tom Reiman: Thank you Chris.

Lisa Gonzalez: Thanks Chris.

Lisa Gonzalez: That was Chris talking with Stacy Cantrell from Huntsville Utilities and Tom Reiman from the Broadband Group, discussing the dark fiber network plan in Huntsville, Alabama. We have more on the plan at the Huntsville tag on muninetworks.org. Check it out.

Send us your ideas for the show. Email us at podcast@muninetworks.org. You can follow Chris on Twitter. His handle is @CommunityNets. You can follow Muni Network stories on Twitter. The handle is @muninetworks.org. We want to thank you, Kathleen Martin, for the song Player versus Player, licensed through Creative Commons. We also want to thank you listeners for tuning into episode 191 of the Community Broadband Bits Podcast.

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