Transcript: Community Broadband Bits Episode 194

This is Episode 194 of the Community Broadband Bits Podcast. Chris speaks with Travis Carter of local Internet Service Provider US Internet in Minneapolis. Travis describes how this local ISP builds networks to serve the community. Listen to this episode here.

 

Travis Carter: We're not building this to sell it. We're building it to be a long term viable solution.

Lisa Gonzalez: Welcome to Episode 294 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. This week, Chris interviews Travis Carter, Co-founder of US Internet, a Minneapolis internet and data services provider. The company is deploying fiber in the community and offering high quality internet access at affordable rates. Travis and Chris have a conversation about the company, what it's been like working with the city and the philosophy behind their pricing and customer service. This is content-rich interview in which we learn how a local provider began and how it has evolved. Here's Chris talking with Travis Carter, Co-founder of US Internet.

Chris Mitchell: Welcome to the Community Broadband Bits Podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance. Today, I'm in Travis Carter's office at USI. Welcome to the show.

Travis Carter: Thanks for having me, Chris.

Chris Mitchell: Briefly, what is USI?

Travis Carter: US Internet is an internet service provider that actually started in the basement of our apartment in 1995 in southeast Minneapolis. We evolved through dial-up, DSL, ISDM, the myriad of ... I think, we counted the other day, 35 different internet connectivity technologies over the last 21 years. Today, we're sitting here with the topic we're discussing, our fiber product as well as co-location, messaging, and other supportive internet-type services.

Chris Mitchell: I think people in the area might know you from the WiFi project.

Travis Carter: In 2007, the City of Minneapolis awarded us the ... The idea at the time was to have a ubiquitous, 100% metro WiFi network in the City of Minneapolis. We proceeded to install 2500 WiFi access points around Minneapolis. We still run that technology today.

Chris Mitchell: That's been something that's been terrific for low income folks, but it has not been a very high-performance network.

Travis Carter: No, WiFi, at the time, it was the state of the art, but, to be quite frank, it never really lived up to the billing. It's difficult to get predicable, reliable connectivity. In today's world, at 6 megabit as our high end product, it's in its waning days of use.

Chris Mitchell: One of the things that you've asked me as we've been talking in recent months is, I think, why I'm so interested in USI, US Internet, in part because I'm so focused on municipal networks. I think a lot of the things that you've done provide good lessons for municipalities and others that want to start up. Also, I think that there's a great opportunity moving forward where perhaps companies like US Internet might be working with local governments in some ways. For anyone who's wondering why we're interviewing a private ISP, that's why. We've done it before and I'm sure we'll be doing it again. I wanted to ask you, one of the things that I think will really gives people a sense of who you are and what you've done, is you talk occasionally about Rodney Dangerfield. Tell me a little bit about how the movie, "Back to School," resonates with your experience.

Travis Carter: It's one of those scenes that I remember and I often look back upon, is there's Rodney sitting in the class with the traditional, highly educated English professor at the board, writing down how stereotypical business is done. Rodney keeps interrupting and raising his hands and saying, "Oh! What about this? What about that? This is how it happens in the real world." As I hear people talk and I hear people discuss technology and applications and the process of bringing it to bear, I often want to raise my hand and go, "What about this? What about that?" We approach technology from a very practical application standpoint, not-so-much from a theory standpoint. We actually get out in the ground and dig holes and hang fiber and bury fiber and hang radios and service customers, do the whole fulfillment cycle. It always takes me back to that movie, because I'm, "You're missing a lot. There's a lot of pieces to this puzzle." Quite frankly, I think a lot of people that I've talked to, they have one or two of the pieces, but it's a 1,000 piece puzzle.

Chris Mitchell: I think one of the things that you mentioned to us is that you got into fiber in part because of your frustration with the wireless, not being able to do the things you wanted to do with it.

Travis Carter: Pre-Netflix, WiFi was great. Post Netflix, it caused a lot of contention on the network. About 82% our bandwidth today is some sort of streaming entertainment. With high def and the other even 4K and things in the future, it put the heavy, heavy, heavy constraint on the backbone. Our initial foray into fiber was, "How do we solve this backbone problem between our WiFi nodes? We need to get those bits out of the air and onto a cable as soon as we can." Quite frankly, I didn't know anything about it, but I figured we'd run fiber all over plant Earth. Somebody must know about it. Our friends over at Corning came in with their van. Sat outside, opened the doors up, and said, "Welcome to fiber." We went down to our friend at Ditch witch, and they said, "Here's a drill. Here's how you make a hole in the ground." We started piecing all the puzzles together. Again, we're Rodney up in the classroom going, "We should be able to figure out." We're not really inventing anything. We're taking things other people invented and putting them together. That's how we got into fiber. That was our initial plan was to hook these nodes together to bring egress or backbone to this to satisfy the ever-increasing, or at this point, the unconsequential thirst for bandwidth.

Chris Mitchell: One of the impressions I had that as you've been doing this, you've been in your own bubble. You've been figuring out what works. You've been making it happen. You haven't really been paying attention to what's happening at the state, or the federal level in terms of regulations.

Travis Carter: No. I go to a few meetings occasionally, just to try to get to ... I always say we're in our own aquarium here. We're doing our own thing and trying to satisfy our customers' needs and expanding the network and providing all those. I don't often have an opportunity to stick my head up and look at what's going on. I listen to your Podcast. I see a few other. The Blandon report, I like to read that of what's going on around Minnesota. Other than that, I'm really not well-versed on what's happening from a policy standpoint, because again, we're nose to the grindstone, fulfill customers.

Chris Mitchell: I get the impression that you were unimpressed with the State's broadband task force and even some of the other trade meetings where some of the telephone companies are in. They're still trying to claim that DSL is broadband and people don't really need very much capacity. It struck me that seemed like a reality shock when you're first describing it.

Travis Carter: I often try to think, if I was in their shoes, that's the story I would be telling as well because they have an infrastructure that's built. I'm assuming the vast majority of it has been paid for so it is, from a business standpoint, quite frankly, it's very profitable for them. Why take a huge jump when you can take a minimal jump and still fall within the confines of what the FCC today is saying is acceptable broadband. I, from a Minnesota standpoint ... Again, I have to preface this by saying, we have the luxury of being in a high density area. When you go out into rural Minnesota, I took a tour one time out to the Renville area, just to see what it was. The logistics of taking a gigabyte or a multi-gigabyte service to a farm, that's a big job. I think ... You can still do the town. Then, you could take the income from the town and build out from there, which is no different than from what we're doing here in Minneapolis. We're taking the income, we're re-investing it, and continuing to expand.

Chris Mitchell: Only the difference is, that Century Link and Frontier are taking the income from the towns and they're shipping it to shareholders and giving it to their CEO's in terms of excessive pay and that sort of thing. Actually, one of your billboards is talking about the excessive pay of some of your competitors.

Travis Carter: From a marketing standpoint, that's a very valid message. The thing is, in these big, huge corporations, it's not just me and my business partners and 50 employees working, where we can do it. They've got shareholders they answer to. They've got all the infrastructure that they need to answer to, where can basically dig a hole, pull a fiber, and hook people up. My hope is that we never turn into that and that's really the core mission here is to keep a flat, lean organization that can fulfill what customers want. Our mantra is very simple around here, "Build a system. Build a service that you want to use." That's really key. If I want to hook into this network, it should be exactly what I expect it to be. Really, there is no this concept of customer and service provider. We're really ... Everybody's the customer, including us.

Chris Mitchell: That's something that I want to touch on. We're going to talk a little bit about some of the specific interactions you have with Minneapolis and where there are some challenges in working with local governments. You require people in the company to go through the experience of what a customer will see when they first sign up.

Travis Carter: Oh, absolutely. I think it's very important that everybody knows ... Well, everybody does already know. They've dealt with companies that are frustrating. They've dealt with companies that are difficult to get ahold of. They're dealt with companies that have a 27-layer telephone tree to ultimately get you to exactly the wrong person, who then transfers you and magically it disconnects. I'm not really sure why that happens every time or these games where you have to call in every year because you're ... This blows me away, to be honest with you, Chris. I don't understand why your bill cannot be the same very month. I mean, just the most rudimentary thing, when you go out and sell somebody a service for $1.00, how is that now magically $1.90? If you read the reviews and posts online about our service, it really amazes me when people ... One of the things they're most amazed about is that we're able to bill your correctly. That's a big deal. Secondarily, when you go to Speed Test and you hit the button to test my speed, it is always what you get, and, quite frankly, in most cases, it's more than what you're paying for. It seems like the bar is very low. The expectation in my mind, is very, very low, for people. I think that's our industry. We've gone from 110 bog modem to 10 gigabyte in a very short amount of time. It's taking time for people to catch up. I think their expectations need to be more than what they are today.

Chris Mitchell: You've been building in a number of different neighborhoods in Minneapolis with different characteristics. One of the things you've said is people generally assume that the higher income neighborhood are going to be the better customers. Has that been your experience?

Travis Carter: No, I would say ... Now, if we were having this conversation two years ago, I would have said, "Absolutely." I would say by "better," I would say percentage-wise, how many people adopt the technology. We have noticed that the higher tax-based neighborhoods tend to have older residents that live in them that have less of an interest in technology. It's very easy to tell when you knock on somebody's door to sell them this new, fancy fiber optic service, they're sitting there with a Motorola flip phone. They don't really have that interest in technology that maybe somebody in more of the millennial, in Minneapolis, like the uptown neighborhood, or even in the middle income neighborhoods. These people, technology means something to them. Internet means something to them. Speed, reliability, and cost too. If I've got a multi-million dollar home in our Kenwood neighborhood here, saving $25 to $50 a month, maybe isn't as big a deal as it is to somebody else. That's just been our experience. It's more about how do the people value or what's their perception of value to the internet. If all you do is check your email once a week, is really a fiber optic facility the right technology for you? Probably not.

Chris Mitchell: One of the questions, I guess, that pops up is, "Is a measure of success the average revenue per user?" Or, is it more about the take rate? You just said that in terms of success, it might be more about the number of people that are subscribing.

Travis Carter: Yeah. We've tried to ... We'd like to get everyone hooked up. We come in at a very well-below market price point. It's really about the number of homes, more than trying to get the higher dollar amount. We've gone for the price performance. We're the fastest, least cost internet you can get, in our service area. We basically get everybody.

Chris Mitchell: Talking about Minneapolis, you've had some challenges in dealing with them. I don't think ... We're not here to say "Minneapolis is doing it wrong." or, "They're stupid." or, anything like that. We're here, I think, we want to get a sense of what local governments can do to make things easier. One of the things that surprised me is that when you said that there were some challenges in working with Minneapolis were some things that slowed you down. I immediately assumed it had to do with permitting in the rights-of-way because that's what almost everyone complains about. You said that actually wasn't one of your main challenges.

Travis Carter: If I was to rank Minneapolis, I would say they've been incredibly easy to work with compared to stories I've heard with other people. Right-a-way, the permitting department, these are all ... This has been really, really, really a relatively easy process. We were willing to work with them to help us understand the process. Our biggest issues, quite frankly, was there was no precedent when we set up of a central office or a switching station, there was no precedent for where those sat. We got thrown into this other bucket of "other" from a zoning perceptive. Now, we had to zone ourselves a certain way. We had to build this little Taj Mahal in the middle of the neighborhood because they could make us. We were just assuming we could put up a little concrete building and off we go.

Chris Mitchell: Just before we go to this, you're building a ... You use active E. Right?

Travis Carter: Correct.

Chris Mitchell: You need these huts, not on every block, certainly, but you need a couple in every city.

Travis Carter: We figure Minneapolis will end up with 8 of them. It's really the old-fashioned Telco layout from the early 1900s, where we have a dedicated fiber that goes to every building, every house, every everything. In order to do that, we bring them all back into local central offices or switching stations. Those were just, from the ... That was our biggest challenge was getting that permitted correctly.

Chris Mitchell: If I was going to put a dentist office somewhere, I have to make sure the City allows me to zone it there. You guys want to have a facility, it's not much different, it's a little smaller than a dentist office, but you want to have racks and racks of machines. They didn't have a precedent for that in the code.

Travis Carter: There's probably been nobody else that's really ever come along wanting to do this. They really had no reason to have a zoning code for it. I think the way cities work, and, again, I'm no expert is, if you don't fall within the buckets, then you go into the other bucket. Once you get into the other bucket, it's a little bit more work to go through the process. I would say certainly from a right-a-way standpoint and from getting permits and getting them turned in and working with all the city personnel, it's been spectacular. It really has. When the city has, "You have done something wrong." We need to fix it. Or, if we need a variant, we need to ask them. It's really, quite frankly, learning the process. That really took most of our time is to learn and understand the process. We have a meeting with them every year, where we sit down and we say, "All right, what did we do right last year? What did we do wrong? How can we improve it?" We take all of our crews. We put them through training. We talk about what you can and can't do in the city. It's a constant education process. We try to make it better-and-better every year. I feel for other people who are having problems with other cities because, I'll tell you what, the constituents that get this service, they're beyond ecstatic.

Chris Mitchell: That's one of the things I think you've found is that when you have a challenge, for instance, I understand it's been a little bit more of a challenge working with the Park board, which in Minneapolis, is a much stronger organization. You've found that, I think, as people are really excited about it, they will contact their elected officials and reach out and say, "We think you should make it a priority to help or to allow US Internet to invest."

Travis Carter: I think our product speaks for itself. I like to joke and say, "We're the second favorite brand behind the Minnesota Vikings in Minneapolis." We have a very passionate and very loyal backing behind us. If, for instance, with the Park board, when we run into problems, we don't have to do a lot because the neighborhood associations take off and champion the cause. That works out really well.

Chris Mitchell: What is the challenge with the Park board? For somebody who doesn't even know why you would have to talk to the Park board?

Travis Carter: I didn't know this either. Apparently ... The only interaction I had with the Park board, is I got a speeding ticket when I was 16 from the Park police. In my mind, I look back at the Park police and I went, "Why the heck is there a Park police? I don't even know what the heck's it for." Apparently, in Minneapolis, and I don't know the whole story, this is sovereign land.

Chris Mitchell: We've got great parks.

Travis Carter: Yeah. You know what? I will say absolutely ... Somebody was pretty clever back in the day. You don't see all the house butted up right against the lake like you do in a lot of other cities. It is no different than if I wanted to dig in your yard. I have to ask your permission and the Park board has said, "No." We have to make other ways to solve our routing problems with fiber and then, unfortunately, there are certain people in the city that will not be able to get service from us. That's just the ... You've got the poles being consuent by Comcast and Century Link. You have the Park board that's holy ground. We have to go ... There's certain people we won't get to.

Chris Mitchell: For some people, it's inconvenient, because you have to go a different way, but there's some people that you just can't get to otherwise.

Travis Carter: No, because their home is facing the Park board. There's sandwiched in-between other houses. There's just no logical way or safe way to get to them to bring them a fiber connection. We, unfortunately, have to tell them that at this particular moment, we're not able to bring them service.

Chris Mitchell: One of the things that I found interesting was the big ISPs, they'll generally claim that the biggest threat to being able to invest is that cities are out of control and too hard to deal with. I've gotten the impression from you that as a small ISP, one of the biggest threats you perceive is from the Comcast and the Century Links that might take action to try and run you out of business.

Travis Carter: We often talk about what they could possibly do. I have yet to come up with an answer for that. They're the perfect competition. You want to always be competing against the 500 pound gorilla that has been providing sub-standard service for 25 years or longer. What's not a better situation to be in than we're in? It's very simple. You just go knock on a door. When they open the door and say, "We've been waiting for you." It's a good feeling.

Chris Mitchell: The question is then, "Why aren't investors lining up to throw money at you to go out and connect more people then?"

Travis Carter: I think it's because of our whole thought process. We're not building this to sell it. We're building it to be a long term, viable solution. I grew up in Minneapolis. My business partner grew up in Minneapolis. We went to Minneapolis South High School. A big goal for me next year is to wire up my family home that I grew up in. A lot of people want to spin these things and sell it off to some big entity and go sit on a beach. I'd get bored after a day on a beach. This is what I enjoy doing. If we built this and sold it, what would I do tomorrow? You've got to have a reason to get up every day. Right now, this is one of the primary things that I like doing. We're letting the network build out at a sustained rate. The other thing I challenge people that say that we're not growing fast enough is, I challenge them to walk our network. Get a brand new pair of shoes and go walk in the city sometimes. It's over 50,000 homes we're in front of right now. That's a lot of houses in just 5 years.

Chris Mitchell: You said you're doing pretty well.

Travis Carter: We're doing amazing. It's doing the simple things. Providing the service that you promised, billing the way you promised to bill. It's unbelievable in this industry. Domino's Pizza can figure out how to get you a pizza in 30 minutes, but how come we couldn't figure out if you have a tech support problem, why can't we have a smart guy or gal go over to your house and help you fix it instead of you sitting on the phone? Our head of customer service says the only reason we can't fix your problem today is because you've not available. That's our approach to business. It's these simple, simple, simple things that if you over-service your customer, what is Comcast and Century Link going to do? Nothing.

Chris Mitchell: That's one of the questions I have, though. If they decide to cut their rates dramatically, if they decide, "We're going to lose money in Minneapolis until we make Travis run out of business." That's the fear. That's something that we've faced in some other cities with municipals. I think there are laws that are supposed to protect you but, unfortunately, people that enforce those, haven't been doing a very good job.

Travis Carter: I would like to interview a few of our customers and say, "If they gave it to you for free, would you even take it?" I feel that we ...

Chris Mitchell: That's a good position to be in.

Travis Carter: Yeah. I can give you thousands of people that would rather pay us to have the service than get it free from somewhere else. Free is not always the best. People want a high bandwidth solution, low latency, low jitter, consistent, at a price point that makes sense. They're happy to pay for it and they're happy to deliver it. Our metric of success is very simple. How many tech support calls do we get every day? We get 1 per 1,000 users. 90% of those are inside WiFi problems. That's a good metric to work towards. I go back to the aquarium analogy. I'm really not concerned what anyone else is doing. I'm more concerned about what we are doing. I like it when the lady at the Broadband Institute called me "a cowboy," because that's sometimes what we feel like. It's like we're just marching along doing our own thing. I occasionally will drive up-and-down the street to see if Century Link has any customers in our area. I have yet to find one. I know we're doing something good.

Chris Mitchell: You've mentioned that you're interested in working in other cities potentially.

Travis Carter: Sure.

Chris Mitchell: Not only that, but ones that don't have snow half of the year.

Travis Carter: That's the big Achilles heel in Minnesota here, is, unlike today, which is beautiful, we usually don't start til April 15, and we're done November 15. We have a very short window to build. Our network is completely underground, so we have to directionally drill everything. All the main line, all the backbone, all the drops to the homes. From a construction standpoint, it's a big, big, big job. This isn't just streaming some fiber down some poles in the alley that are already there. There's a ton of benefit to this network. It's underground. It's very reliable. It's Ethernet, so there's no weird technologies or splitters or shared anything in there. It's simple to troubleshoot. It's simple to maintain. It's consistent. It uses off-the-shelf electronics. It's very, very, very reliable. It's just we don't have enough months out of the year. What we've looked at, is we've looked at maybe going to a city in the south, somewhere. The problem you run into is the bandwidth consumption is so high on these fiber networks, that we need to be close to someplace with adequate bandwidth. We can't be way up in northern Minnesota, where our cost to deliver the service is to high. We have to be near a major metropolitan area to get that type of capacity.

Chris Mitchell: Or, if you're familiar with some of the things like Allied Fibers, slowly building these neutral fiber routes across the US. You just need to tap in somewhere where you get back to a point of ...

Travis Carter: Exactly. Exactly. We have to get back to somewhere. Cermak in Chicago, 511 here, NCC in Omaha. If we can get to somewhere like that, that solves a tremendous, tremendous problem. It's a problem I saw at the Minnesota Broadband Association is, they were all talking about bringing bandwidth out to the farm, or bringing bandwidth out to the rural area. These people are going to use it. There's no difference between a user up in the iron head of Minnesota and a user in Minneapolis. They're all going to use the same amount of bandwidth. You've just to be able to get it out of your network somewhere. They have a much bigger challenge than we have here in Minneapolis.

Chris Mitchell: Although, fortunately, in the Iron Range, they have the Northeast Service Cooperative now. Increasingly, we do have some of these where it's been smart, local investments. In that case, enabled by the stimulus, but people have done the work there to make sure that they have some of this available.

Travis Carter: If I were a town and I was looking to have somebody come in and be an alternate provider, that would be one of the very first things I would highlight is, "Here is the way to get onto some fiber transit to get out of our city, back to a place where you can buy bandwidth at a reasonable price."

Chris Mitchell: In some ways, that's how you're expanding a little bit into St. Louis Park, and they've made it easier for you because they provided that.

Travis Carter: St. Louis Park. They're a classic example of a city doing it right. They've really got a forward thought. They're putting in extra conduit when they're doing construction. They're putting in extra fibers. They're leasing fibers. From my standpoint, and they're even encouraging apartment buildings and MDU's and new construction to bring easy egress out to the right-of-way. These guys over there really got it figured out how to do it right to entice people to come to town.

Chris Mitchell: One of the things you said struck me. You were describing one of the things about seeing those parks, this is they have the fiber. They've made it easy on you. You reached out to them and you said, "Hey, we're interested." They basically wrote back and said, "Here's the price."

Travis Carter: Clint over in St. Louis Park, basically, I emailed him and ...

Chris Mitchell: Their CIO.

Travis Carter: Their CIO. Great guy. Said, "Hey, we would like to have some fibers in St. Louis Park." He had already done all the homework with the City Council. Had already got it all passed. Basically, had a rate card no different than if you were to call us up and say, "I want fiber in Minneapolis. I can tell you here how much it is." He operated just like a normal, what I would say, a business operates that was in the business to promote and utilize the services that the city paid for. He knew down to the fiber mile, he knew the routes, he knew the maps. He came out here. I've never seen anyone from a city act like a salesperson. "Here's all the data. Here's the price. How many do you want? I have them in stock right now. I can get them going for you." It was amazing, to be honest with you. St. Louis Park is an area we're really interested in getting into. St. Paul, we want to get into St. Paul.

Chris Mitchell: It's a beautiful city.

Travis Carter: Yeah. We want to get into ... In Minneapolis, we have this thing called the 494/694 loop, which is just a big circle around the city of freeways. We'd like to really focus inside there. We've got business initiatives. We've got a lot of different initiatives associated with this fiber. We're learning very simply that the wireless was an interesting technology.

Chris Mitchell: The WiFi, in particular.

Travis Carter: WiFi was an interesting bridge technology, but fiber really is the ultimate, end-all technology. Out of these 30+ different technologies we've had over the last 21 years, we finally feel we're at the final technology that will install in our lifetime. Every time we bring a fiber up to a building, a home, a streetlight, that'll be there long after we're gone. That's the way it should be. We can really look at this investment. It's just not a short-term investment, but really a lifetime investment for us.

Chris Mitchell: Great. Thank you.

Lisa Gonzalez: That was Chris and Travis Carter, one of the Co-founder of US Internet, a Minneapolis internet and data services provider. Send us your ideas for the show. Email us at podcast@muninetworks.org. Follow Chris on Twitter. His handle is @communitynets. You can also follow muninetworks.org stories on Twitter where the handle is @muninetworks. Thank you, Kathleen Martin, for the song player versus player, licensed through Creative Commons. Thank you for listening to Episode 194 of the Community Broadband Bits Podcast.

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