Transcript: Community Broadband Bits Episode 197

This is Episode 197 of the Community Broadband Bits podcast. Charles Barr and Lauren Saine from Webpass join the show to describe their approach to competition and networking. Listen to this episode here.


Charles Barr: The more competition, the better, must be a competitive utility and we don’t want to be in a situation where people can't change. They need to have a choice.

Lisa Gonzalez: Welcome to episode 197 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. In most urban centers residents can expect to find large corporate providers offering Internet service with very little competition. This week Chris talks with Charles Barr, President of Webpass and Lauren Saine, the company’s policy advisor. Charles describes Webpass’ history and growth and its focus on providing service to apartments, condos and commercial buildings in San Francisco and 7 other cities. As Webpass grows in San Francisco, they're working with city leaders to help them design better policy that will encourage competition. Learn more about the company and their approach and Now, let's get to the interview, here is Chris with Charles Barr, President and Lauren Saine, policy advisor from Webpass.

Chris Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell. Today I'm speaking with Charles Barr, the President of Webpass. Welcome to the show.

Charles Barr: Thanks Chris, pleasure to be here.

Chris Mitchell: We also have Lauren Saine, policy advisor to Webpass on the call as well.

Lauren Saine: Hi Chris.

Chris Mitchell: I want to learn a little bit more about Webpass. We're going to talk about what cities can do to improve Internet access in your view and you guys have a couple of proposals. Let's start off with a simple question. What is Webpass?

Charles Barr: The history of Webpass is very similar to lots of other small ISP’s that have started in the past 10 years in the United States. Webpass started in San Francisco in 2003. I'm the sole owner and we're a cash flow positive business with no outside investment, so that makes us very unusual in the world of ISP’s. We’ve grown steady for 13 years. We grow roughly 50% each and every year and now we're in 5 cities. We've expanded from San Francisco into San Diego, Miami, Chicago and Boston. The service we offer is a 500Mg Internet service for $60 a month.

Chris Mitchell: Those are a lot of high density communities. How does your model work exactly?

Charles Barr: We search for the density. We want the density because it makes it easier for us to deploy the network. The way that our network works is its point-to-point wireless to apartments, condominiums commercial buildings in the urban cores of cities. The point-to-point wireless is the predominate technology for the network, but then we backfill that with fiber optics. We also have a fleet of fiber trucks and send the guys out there to connect buildings with fiber. Fiber for us simplifies the network. It makes it easier to run. It makes it a simpler network, but the customers really can't tell the difference between the 2. Density is key. The point-to-point wireless works very well in dense environments, but it doesn’t work well over long, long distances so suburban areas are avoided for us.

Chris Mitchell: When you say point-to-point wireless I think we may have a few listeners who are thinking wireless, that's Wi-Fi right? Can you just give us a very brief explanation of what point-to-point wireless is?

Charles Barr: Sure, point-to-point wireless is 1 radio talking to another and excluding everything else in the environment. Unlike Wi-Fi or cellular systems or any other point to multiple point system where there's 1 central transmitter and lots of receivers point-to-point wireless are just 2 radios talking to each other. They essentially replace a piece of cable, so they're very interference immune. They're very high performance. They don’t [draw

00:03:47] packets. They don’t add any latency into the equation.

Chris Mitchell: I'm always curious in the big cities with the point-to-point wireless. We're certainly seeing that in more areas. Is that something that you need access to tall buildings to try and avoid trees? What are some of the barriers to doing point-to-point wireless within these large urban areas?

Charles Barr: Technically you have to know how to set them up. You do have to avoid trees. You have to have a clear line of sight. You have to have a clear Fresnel zone. The bigger obstacles aren’t technical. They're regulatory and they're dealing with landlords and getting permission to actually put the radios up. That takes a lot more time than the engineering. The engineering is pretty straightforward.

Chris Mitchell: When you say to put the radios up I'm guessing you don’t need to put a radio in every last apartment unit. Do you do to the top of the building and then run wires down or do you go through windows?

Charles Barr: We go to the top of the building. On the roof of every building we will add a mast and put a radio on it. That mast is typically 6 feet. It's secure from the environment, drilled into the wall. It won't move in a hurricane in Miami for example. It connects that building to another building. One building connects to another connects to another connects to another and then rings are introduced and meshes are introduced. It becomes a very complex spiderweb over the city.

Chris Mitchell: When you talk about the mesh, so one building if something happens to it then it's not a single point of failure I'm guessing.

Charles Barr: It is for that building. If something happens to that building the residents will lose Internet service, but it's not a single point of failure for the network as a whole. You can lose 1 or 2 buildings every day and they break every day. We have buildings go down every day for all sorts of reasons, but the predominant reason is power outages. The power goes down in the building, the Internet goes down in the building, but it doesn’t affect the buildings around it.

Chris Mitchell: That's pretty important. Now, when we had talked before and I was getting a little bit more acquainted with Webpass you had a pretty strong critique I think of people that re focused, I think you might say single-mindedly, on getting fiber everywhere. Which is a position that I have adopted; although, I think I'm comfortable waiting for some period of time. I like the idea of using both fixed wireless and fiber over the time it takes to get fiber everywhere at a reasonable cost. Tell me more about why I should not be focused so single-mindedly on fiber.

Charles Barr: Internally we refer to that as the fiber fetish. Every journalist in every article in every communication about the Internet assumes that fiber is the answer and that's just not the case. Fiber is part of the answer, but it is not the answer. The answer has to be a much more comprehensive approach to include all the problems that are required to deliver Internet. Fiber’s great, but fiber does have some disadvantages. The first and foremost is it takes forever to put it in the ground because you have to go through all the permitting process to get it in the ground. Secondly, fiber is not movable. When you put it into a building, as long as you have a customer in that building its great, but as soon as you lose that customer then it becomes a dead asset. That's typically why fiber companies have problems expanding if they're married to fiber and fiber only. That’s 1 of Webpass’ great advantages, if you call me today for service I can turn you on tomorrow because I don’t have to go through that process of getting fiber in the ground. I’ll bring you fiber in 6 months, but you're going to get online immediately. That's the great advantage of point-to-point wireless.

Chris Mitchell: One of the things that you've noticed is that fiber takes a long time to get in the ground, but it's not the only thing that is slowing down Internet access improvements. You've been promoting a new set of policies to improve Internet access to enable companies such as yourself to do a better job of expanding. Lauren, can you tell us a little bit about what you have in

mind? Lauren: As you probably know we've had the dream of competition in the Internet marketplace going back to the Telecomm Act of 1996, but so far that dream hasn’t come true. We’ve seen that we're stymied at the Federal and State level in getting a thriving Internet marketplace where we have low cost, high speed Internet. Cities all around the country are stepping up. Given Charles’ experience here at Webpass he's discovered what the various barriers are to an independent competitor like us getting into the market. We’ve put together really a tool box of solutions and put it into an Internet franchise ordinance and we've proposed it to our Board of Supervisors. What it would do is first of all it declares Internet service a public utility in the city. Then, it's an optional, nonexclusive franchise process for any ISP who chooses to go through the franchise application process. We’ll have easier access to buildings, to rights of way, to existing infrastructure.

Chris Mitchell: I think this is actually 1 of the areas in which all new competitive providers such as yourself run into the problem of the apartment buildings. Now, let's step back for a second and ask, and Charles you might be the one to answer this 1, how have you been so successful at getting into apartment buildings. Then, we can come back to some of the challenges you still face.

Charles Barr: We're successful because we approach each building as an amenity and we try and introduce competition into those buildings. Everyone is used to the feeling of helplessness when you can't change your Internet provider; when you only have 1 choice or you're unhappy with your provider and you essential have no choices. By framing it in that way when we approach residential buildings and we say, ‘We want to be competition in this building. We want to bring it. We’ll foot the bill. We’ll pay for everything and then we’ll vie for customers inside.” It's a very god proposition for those residents and most of the time they’ll take it. Even if they don’t sign up for Webpass service, having an alternate provider there is comforting because then you can fire the other guy or you could fire Webpass. You have the ability to choose your ISP and that's really what people want. They want the ability to choose, so that's how we frame it.

Chris Mitchell: I absolutely understand how that would be popular with residents, but I was talking recently with another provider that was trying to get into apartment buildings and he was suggesting that their frustration is that apartment owners will often, I'm sorry, the building owners will obviously often want some kind of payment or some large payoff to let you in the building. Is that something you've come across?

Charles Barr: We come across it all the time. We don’t engage in it, but we come across it. Landlords have really 2 things to sell. They can sell time and space and that's it. They try and maximize their revenue every way they can and in the mid-90’s many ISP’s would engage in revenue sharing agreements or they would pay rent to be in buildings in order to offer the service. That ultimately is a business killer. We've seen many, many companies come through and try and do the rev share model and they never last. Webpass as a rule never does it, but that keeps us out of certain buildings. The buildings we don’t have in San Francisco we’ll never have because they're typically landlords who demand rev share.

Chris Mitchell: I think that this is right where we get back into the policy Lauren which is to wonder with the ideas you have for policies how can the City do a better job of making sure that residents of apartment buildings actually have the choice in

providers? Lauren: We expect that there will be some difficulties with some developers and some landlords, especially small landlords. We're saying that the developers are not allowed to just give exclusive access. We can do that as part of our regulatory powers already. A lot of developers actually want to do this. They’re already working with us, so on that side it would really just level the playing field. On the landlord side we recognize that it would require Internet cabling in multiunit buildings and this might be a burden on some smaller landlords. We do see that the City might also have to establish a support program to help small landlords retrofit their buildings. We’ve actually been through this process with earthquake retrofitting, so we have a model for that.

Chris Mitchell: I'm curious if you have a sense of the costs. They seem to have come down a lot in recent years. We have this fiber that can be glued into molding or behind it. It's so manipulable now. Is there any excuse for a landlord that says I want it do it. It's just not feasible.

Charles Barr: We've priced it out and we actually have a rewire program and Webpass where landlords can come to us. We provide the financing. We’ll put them in touch with a licensed contractor who will run all those cables inside of their units for them. It typically runs anywhere from $300 to $700 per unit is a good ballpark figure. In San Francisco particularly rents are extraordinarily high, so it's not a financial burden to do it. What we see more often in the new buildings now is developers striking deals with 1 provider to exclude other providers by omitting those cables intentionally. There'll be a brand new building. It’ll have 300 units. They’ll strike a deal with AT&T let's say or the phone company. They’ll only put in 1 cable for that phone company and say it's dedicated to that phone company. They won't put in coax for cable TV. They won't put in twisted pair for alarm systems or old dial tone. They’ll only put in 1 fiberoptic cable of that company which has no management points. When you do that that they're basically creating exclusive agreements physically. The Internet franchise is intended to say that's a no-no. You have to build these buildings with the idea of competition in mind.

Chris Mitchell: Are you seeing support from either on the Council or from other people in the City that really want to see this policy set of ideas move forward?

Charles Barr: We get great support from the aids of the Councilmen, but not necessarily the Councilmen themselves. In San Francisco it's called the Board of Supervisors. We've talked to all of them in 1 way or another, but haven’t got a sponsor or a champion of the legislation yet. We will the idea is solid enough that somebody will bring it into the public discourse, but we don’t have that person

yet. Lauren: I guess I have a little bit more positive impression from our Board of Supervisors. I think they're very interested in bringing good Internet to San Francisco of course. I think some of their staff have looked into the ordinance and there are definitely some jurisdictional challenges. The City would have to be willing to defend this. I think they're really balancing they want to step out in front of this. What we really need to do at this point is to, I think, do some workshopping or set up some forums where we can get input from a lot stakeholders and really strengthen the ordinance so that it can have broad support. I think the interest is definitely there. On our website when you're trying to get Webpass service we have a place where you can enter your address and phone number if you want to bring Webpass to your building. We have a whole list of people who want us to come. We have a lot of public support.

Chris Mitchell: I was noticing that you, as part of these policy proposals, you include a ranking which I believe New York City has through a nonprofit organization that's been spun off that does rankings for web access availability. Tell me why that would be important to

you? Lauren: It was 1 way to avoid another layer of regulations. What we're doing is really copying the gig economy model Uber or Airbnb and so on where the customers have an online system where they can rate the company. Perspective companies could look there and find out how good the quality of service is and how the prices are, the speeds and so on. That would be the way to really promote good customer service.

Chris Mitchell: What makes you so confident that you would do well relative to other service providers in a situation in which people had more choices?

Charles Barr: I love that question. The answer to that is because Webpass was forged by competition. Here in our home market there's probably 20 ISP’s that are all competing already for all the customers that we have and we've established a dominant position. The more competition the better and that's what makes this utility, the Internet utility so unique is it's a competitive utility. It must be a competitive utility and we don’t want to be in the situation that we described earlier where people can't change. They need to have a choice. There's going to be competition. The best way to approach it is just to embrace that competition and move forward with it. Webpass has proven time and time again we can do well against competition.

Chris Mitchell: Lauren, do you have anything to add to that? Why is Webpass uniquely suited to doing well in a competitive

environment? Lauren: We're always tops on and we've been named in some policy papers such from the New America Foundation as the fastest service. We have great ratings on Yelp. We just get lots of customer feedback that shows that we're excellent. We don’t have any contracts, installation fees, any of the additional fees that you typically see with the incumbents. Everywhere I go and people see where I'm from if they’ve heard of Webpass they want Webpass.

Charles Barr: As a rule and as one of the tenants of our company we try and make the experience that among equals. Webpass is equal to each and every customer. It's not a dictatorial relationship like it is with other telecomm providers or airlines. You never know with an airline or a telecomm company what you're paying until the bill comes or you get to your destination. We try and take the other tack where we're very direct. As long as you want to be a Webpass customer we want to be your provider. It has to be mutually beneficial. That emotion or that brand comes through to the customers and they are very, very loyal.

Chris Mitchell: I didn’t do a word Cloud of your ordinance, but if I did I think chokepoint would be a word that is in heavy bold. It comes up again and again I think. Why is that idea troublesome?

Charles Barr: Back to your original question why is fiber not the answer? Fiber’s part of the answer, but not the answer, because it only addresses 1 of the chokepoints. To build a network you have to be able to do so many things. You have to get into the public rights of way. You have to be able to put manholes in the street. You have to be able to use telephone poles. You have to be able to enter private property and that's key. You have to be able to get into private property. You have to be able to respond to outages. There's so many things that are required and there are so many chokepoints to your question that most policy makers don’t consider that. They merely consider the technology and the technology they want is fiber, fiber, fiber.

Chris Mitchell: Are there not chokepoints in your network then?

Charles Barr: Of course, there are, but that's what we do. That’s why we're good companies. Every day we find them and eliminate them. Because our network is so organic every day a new building comes online, every day a new commercial customer comes on line, every day 50 new residential customers come online. The network is constantly changing. The bandwidth patterns are constantly changing, the way it's built is constantly changing. That's why fiber for us simplifies the network. When we put it in we can simplify our network management to where we can eliminate chokepoints. That's networking 101, right? They’ll never go away. Chokepoints will never go away. It’s just how you deal with them.

Chris Mitchell: When you say chokepoints is that a chokepoint for the entire City or just of an ISP’s customers? Who chokes?

Charles Barr: If you're talking about our network the chokepoints would be specific links that need to be upgraded. Let's say we put in a gigabit link. It gets to a certain percentage of utilization, in our world it's roughly 75%, when they get to 75% utilization. Then, we have to put in a 2 gig or a 5 gig or a 10 gig link to keep the bandwidth going to make sure that there's always sufficient headroom for the network to move. If you're talking about between networks 1 of the common chokepoint locations is the peering ports. I'm going to peer with AT&T. I'm going to peer with Level 3. I'm going to peer with my competitors and exchange traffic at those peering ports. There are some providers that are notorious for having great internal networks, but artificially clogging the peering ports so that traffic doesn’t go to their competitors. Then, there's chokepoints inside of the building themselves. We're talking about regulatory chokepoints. Getting into the buildings, getting the permits, getting everything set so you can do the actual construction. It's a very different job which is why our customers pay for it monthly. If it was easy you would pay for it once and it would work

forever. Lauren: From a policy point of view, the chokepoints are really any barrier that prevents an independent ISP from getting into the market and competing with the incumbents who here are AT&T and Comcast. As Charles mentioned, that could be an onerous permitting process. It could be lack of infrastructure in a building. It could be a rev share agreement that excludes others. It could be the cabling in a multiunit building that prevents other ISP’s from using that infrastructure. It could be if you have a right to use the utilities and infrastructure under Federal and State law it could be that incumbent utility imposing delays, costs, just preventing you from being able to get into their conduit. It's a whole range of things that whatever stops you from getting into the market and competing with Comcast and AT&T as a chokepoint.

Chris Mitchell: One of the things that's been proposed in San Francisco because the City already has a fair amount of fiber would be making the fiber open to companies such as yourself that could then lease it on a generally a point-to-point basis I'm going to guess for someone like you. Is that something that would help your business?

Charles Barr: It would help, but it's not a monumental, earthshattering change because there already exists tons of middle mile networks in San Francisco that we can lease fiber from. San Francisco’s got at least 6 companies that have spent a billion dollars putting fiber in the ground and its all there. That's the problem with five, it doesn’t connect where you want it to connect and it's still not easy to use even if it's in the ground getting it into the building takes months. It takes months. While it sounds easy and it sounds like that's a solution that will solve all the problems it really doesn’t.

Chris Mitchell: Then, when it comes to the single family homes what things do you need to be able to be able to connect them?

Charles Barr: The way that we're going to approach single family homes is we're going to do it with a wireless solution. I think that's the way the markets going to go because wireless if more cost effective when you get out of dense environments like this urban core where we currently operate in and you move towards a more suburban environment. Then, you have more geography to cover. You have fewer homes per square mile so to speak and that is a recipe for wireless in my opinion.

Chris Mitchell: I have to ask 1 follow up question which is regarding reliability. That's 1 of the challenges we've seen with wireless in the past. I'm curious of you would agree that that had been a problem and if you still have to deal with that in different ways.

Charles Barr: I would absolutely agree with that. It was horrible in the past. The technology wasn’t there, but there's some new technology that we are working on right now that's going to solve all those problems.

Chris Mitchell: If you tell me its 60 gigahertz I'm going to be a little suspicious.

Charles Barr: It's not. It’s basically every band under 6 gigahertz.

Chris Mitchell: Okay, I'm excited. I think that I've come around. I've long been a person who was fiber everywhere. I still believe that we want to have fiber everywhere for a variety of reasons, but I think that in the meantime wireless is a terrific way to get people improved service, to give them an option away from Comcast and AT&T and whatnot. If the technology scales as quickly as you think it will then maybe we don’t have to do the fiber, but I'm still going to be leaning in that direction I have to admit.

Charles Barr: Fair enough, I'm going to prove you wrong.

Chris Mitchell: You know what, I’ll tell you what right now 500 Megabits a second I would take that no matter how it was delivered. You guys are certainly doing well. You’ve got a good name in the market. I really want to thank you for coming on the show, for telling us about your proposals. I certainly hope that they would be enacted because I think many of them regardless of the technology would result in the kind of cities we want to live in with better Internet access.

Charles Barr: I wholeheartedly agree. That's what we're trying to set up, a nice competitive, regulatory scheme that everyone can use to build a competitive utility.

Chris Mitchell: Thank you Lauren for coming on and telling us more about the policy

side. Lauren: Thanks for having us Chris.

Lisa Gonzalez: That was Charles Barr and Lauren Saine from Internet service provider Webpass talking with Chris about the company and their policy work. Email us at Follow Chris on Twitter. His handle is @CommunityNets. Follow stories on Twitter. The handle is Thank you Kathleen Martin for the some “Player Versus Player” licensed through Creative Commons and thanks for listening to another episode 197 of the Community Broadband Bits podcast.