Transcript: Community Broadband Bits Episode 205

This is Episode 205 of the Community Broadband Bits Podcast. Westfield, Massachusetts, now has its own community network Whip City Fiber. To learn more, Chris spoke with Operations Manager Aaron Bean and Key Accounts & Customer Service Manager Sean Fitzgerald.

Aaron Bean: It can be done and it can be done really well at a small municipal level, so fear not. It can be done successfully.

Lisa Gonzalez: Welcome to episode 205 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. Westfield, Massachusetts has recently deployed its new Fiber-to-the-Home pilot project, Whip City Fiber. The community's municipal gas and electric utility is taking charge of the project, which is growing to more neighborhoods as residents and businesses direct the expansion with early sign-ups. Aaron Bean, operations manager, and Sean Fitzgerald, key accounts and customer service manager both from Westfield Gas and Electric join Chris today. Aaron and Sean describe how this Massachusetts town has started bringing fast, affordable, reliable connectivity to residents and businesses in an area of the state where incumbents just don't offer high-caliber services. Westfield Gas and Electric has a loyal following among the community and is now providing that same level of customer service to its Fiber-to-the-Home customers. Check out our stories on Westfield at muninetworks.org and learn more about the service at whipcityfiber.com. Now here is Chris with Aaron Bean, operations manager, and Sean Fitzgerald, key accounts and customer service manager, both from Westfield Gas and Electric.

Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell and today I'm speaking with Aaron Bean, the operations manager of Westfield Gas and Electric. Welcome to the show.

Aaron Bean: Good morning, Chris.

Chris Mitchell: We also have Sean Fitzgerald, the key accounts and customer service manager also from Westfield, Massachusetts. Welcome to the show. Sean Fitzgerald Thank you, Chris.

Chris Mitchell: I'd lover to start off by learning a little bit about Westfield for people that have not been there. What's the size of the community, what kind of things do you guys do there?

Aaron Bean: Good. Sean, take it away. Sean Fitzgerald Okay. We have about 18 thousand customer here at Westfield, at the foothills of the Berkshires, most people do know where do the Berkshires are in Massachusetts, about two hours West of Boston. It's a great community. Again, we supply gas and electric, and now fiber optics for our customers.

Chris Mitchell: Great. Aaron, why don't you tell us something about the fiber optics? I know it's a new pilot project. You guys got a great name for it. What is it?

Aaron Bean: Yeah, the name for our new service is called Whip City Fiber. That ties in with our community roots. A little known fact, Westfield was one of the premiere buggy whip cities in the entire world and so our legacy goes back way back into the 1800s when they produced buggy whips. Now buggy whips aren't in fad now, but fiber optics is and so we wanted to carry on the name of Whip City into our new service.

Chris Mitchell: What happened with the pilot project? How did you get into delivering this service to customers?

Aaron Bean: We have been in internet and fiber optics communications for well over 20 years now. In the mid 1990s, we installed fiber optic cable throughout the city to connect up our municipal facilities to cut down on our telecommunicating costs to both provide data services between our business office and our operations office and our field facilities, such as our sub-stations and gate stations. Since that time we've quietly connected up a large commercial and industrial customers in Westfield and we've been providing them both internet services and dark fiber services to connect them for their buildings. We them came forward last year, where we decided that we wanted to expand into the residential market and provide this service to our residential customers and small business customers as well. Sean, you want to take it from there? Sean Fitzgerald We decided to choose a pilot that was indicative of many facets of the city. We have challenges in both underground and overhead. We have about 241 customers. In that pilot that we launched last year we had a successful take rate in that area, but what we learned was what the construction challenges would be, what the sales challenges would be. We are in a competitive environment in that pilot. Since then, since we've had success in that pilot, we have decided to expand into roughly 2000 more homes and businesses. We started out with about 241 homes last year. This year we'll expand into roughly 2000 homes and businesses. We are just about the embark on a construction launch in the next two weeks for three more fiberhoods and then we'll continue from there throughout this Summer.

Chris Mitchell: You know, one of the things that I noticed in reviewing your Facebook page is that there's a lot of dissatisfaction with the previous players. I know that you have a national cable company and a national telephone company servicing you, and it seemed like they just weren't getting the job done. Sean Fitzgerald Yeah. I'll say this, that what we did was we, Aaron and the team hired a professional marketing research firm to do research to see if there's a need. Our customer overwhelmingly said, "Yes, we would take service from a local provider. We welcome the opportunity to have an option." That market research really pointed us in this direction. Our customers were telling us they wanted it. Our service satisfaction levels are very high. If you look at our annual utility satisfaction surveys, we get very high marks for our local service. We knew that we had something to offer and that arena, and we're applying that great service to this product and service just like we do on the gas and electric.

Chris Mitchell: When you do that, I'm curious, Sean, did you train everyone in the utility to answer questions about telecom or do you have a subset of customer service folks that only deal in telecom? Sean Fitzgerald We have trained primarily our service staff, our customer service staff, but has been some service people like our field engineers and technicians who we've included in some of the training. We have done entire company training, which is broad-based general overview training of the fiber business, but when you get down to the brass tacks, how do you sell fiber, how do you educate customers on streaming and options and things like that, yes, we have done more intense training for our customer service team and it's paid dividends. We're seeing them able to articulate the advantages of streaming, the education process of cutting the cord, because we're not offering television.

Chris Mitchell: Well, I will get into that in a second. I want to direct this question to you, Aaron, as operations managers. One of the challenges that we've seen from communities that have considered pilot projects like this is that you have so many fixed cost with just starting to serve customer. It can be hard to roll it out to a small number of customers without having to write some pretty big checks that may not be covered by that small customer base. Was that a challenge for you at all?

Aaron Bean: Yes and no. The challenge was, as you pointed out, it is a significant capital construction cost. The CAPEX costs are extremely large on your head end equipment, your networking equipment to get that going. That was the largest cost of this entire project for this pilot area. We knew that going in. Throughout the years, as I've said before, we had established a pretty good telecommunication business with our large commercial and industrial businesses here. We were able to use the funds and the revenues that we had received from those businesses and put that to this pilot program. The best part of this is that we had the funds internally from that existing business to pay for that upfront CAPEX cost that we've incurred. This is why part of that plan to continue to expand can lower that overall CAPEX cost over a larger subscriber base, as you mentioned.

Chris Mitchell: I love getting a better sense of the past and how you've been in this for 20 years. I'm always curious, is there a great story that you think in terms of that really justifies why the utility has been involved with fiber? I believe you've connected the School District. You have all different things. Aside from the savings and the revenue that you've generated for the utility, how has your fiber benefited the city? Has it created jobs, for instance?

Aaron Bean: Our fiber has benefited the city, obviously, as you said with the lower costs for the municipal services, their telecommunication costs are very low. We connect up every single school, municipal facility, fire police, technology center alike and provided to them. As far as businesses per se as being attracted to that, because we weren't actively marketing that service, I can't say for certain that that was a driver for any sort of business growth in the area. I will say, as we go forward and from research and speaking with other communities, that as we do announce this more and it becomes more out in the open that we do anticipate additional growth.

Chris Mitchell: Sean, when I was looking at your prices, I was thinking businesses in Westfield have a pretty good deal. Can you tell us about your pricing structure for both residents and businesses? Sean Fitzgerald Sure. The residential price will start at 69.95 per month. No contracts. It's a free Wi-Fi included. That price, we found, is a very competitive price. It's a full gig price. It's 1000 Mbps upload and download. The competitors can beat that price. However, they can't compete with the speeds. We found that that's kind of a sweet spot for the value of the product. In a lot of regards it's underpriced compared to full gig prices we've seen throughout the country, but we feel that we're not here to make revenue for our shareholders. We're here to make enough profit to sustain the business and provide value to the community. That's our driving force behind that price.

Chris Mitchell: What is Wi-Fi? What does that mean, a managed Wi-Fi, where the home usage just doesn't have to worry about it at all? Sean Fitzgerald We do provide, with this service, is a residential style router. We can manage that for the customer as well.

Chris Mitchell: Great. Sean, the businesses, then? Sean Fitzgerald The business price is 84.95 with a three year contract per month or 99.95 with a two year contract. We do add 5 dollars for Wi-Fi for the businesses. At 84.95 at a full gig, a 1000 Mbps, we felt that it was extremely competitive. We did some research to see what the competition was offering and again, we don't have competition on this level of service, but we did see lesser levels of service for much higher prices for our business customer. We feel this is a tremendous value for our business customer and we're eager to get into businesses and see what they think of the product.

Chris Mitchell: Do you have any sense, in terms of not doing television, have you had any push back from people that would like to see you do television or are people just excited to have the gigabit solo? Sean Fitzgerald We have had a lot of questions about this because some folks simply don't understand the over-the-top cutting the cord options that exist out there. One of the gaps is to educate the customers that you can cut the cord. It's not always a one for one replacement of the channel lineup you may have. However, that is growing. Every day that goes on there's more options out there that are becoming available to customers where they can get almost the one for one replacement of the television. However, we are not in the television business. We do get asked about it. However, we are seeing successful acceptance of this product even without television.

Chris Mitchell: Are you doing telephone at all? Sean Fitzgerald At the moment we're not. We are in the process of evaluating the telephone solution. We hope to have a solution available in the Fall, early Fall of this year.

Chris Mitchell: Moving on to the future, Aaron, is this something that you see covering the entire city as it's a sort of out of pilot phase and now just incrementally building toward a larger goal, or do you think that this could just stop at a certain point?

Aaron Bean: Well, I think what we would say is we're in a second pilot for this year. It all boils down to our future, comes to whether or not we can retain funding for this project. We are a municipal department and we rely upon our city council to provide bonding. For us to roll this project out to the remainder of the city would be a significant capital outlay that is outside of our current financial means, so it would require us going into the city council for bonding. Right now we do not have authorization to move forward to the rest of the city. We have authorization to proceed with a small limited amount of fiberhoods to further gage interest, to further validate our construction costs, validate our acceptance rates. From that, we are hopeful that we will be able to demonstrate that the business case will support itself and then we would then be able to receive additional funding.

Chris Mitchell: I think anyone has heard of Westfield before probably knows that Western Massachusetts has been very much under-served by a lot of providers. Comcast rarely reaches outside of the larger cities. Verizon is all but abandoned its DSL plant. I would have to assume that you get calls at a fairly regular basis from nearby towns that are saying, "Hey, are you going to do us next?" Sean Fitzgerald Yes. That's true. We are getting a lot of interest from surrounding communities. It's an interesting dynamic right now with the state and those Hill-town communities. We are focused on Westfield at the moment, but we don't know what the future will bring. We're just focused on getting our product successfully rolled out in the city of Westfield and doing the best job we can for those customers here in Westfield.

Chris Mitchell: You had a competition to expand and to decide where you'd be going this summer. Some of that competition has been over for a little while. Were you tempted with any bribes that any of your neighbors were offering or that sort of thing? Sean Fitzgerald There is a lot of lobbying that we see that people are saying, "Please come to my section of town." We've had customer champion this product, go out and really solicit their neighbors and say, "Hey, make sure you express interest in our website." It's a been a really tremendous experience watching that happen and it shows that the local level of support that you can get for one of these projects can make it a success. That's what's exciting about it. That's what Aaron and I know we love about this, is this a Westfield product and the more people that rally their neighbors, the faster we can potentially bring it to you. That's happening and it's great to see.

Chris Mitchell: That's the kind of enthusiasm that I think is one of those things that marks our community project. I think it's really important for utilities like yours to be figuring out how you can cost effectively bring this next utility out to everyone, so I want to congratulate you and salute you. Is there anything else about this project that you want to tell us before we go, Aaron?

Aaron Bean: The only thing I would add to our conversation is that we appreciate the opportunity to speak with you, Chris, and to help any other municipal utilities out there that might thinking about doing this and I would just tell them that it is a challenge, but it can be done and it can be done really well and successfully at a small municipal level, so fear not. I think that it can be done successfully.

Chris Mitchell: Great. Well, thank you both for coming on the show.

Aaron Bean: All right. Thank you. Sean Fitzgerald Thank you, Chris.

Lisa Gonzalez: That was Chris and Aaron Bean, operations manager, and Sean Sean Fitzgerald, key accounts and customer service manager from Westfield Gas and Electric in Massachusetts talking about their new Fiber-to-the-Home service, Whip City Fiber. Remember to check out their website, whipcityfiber.com. You can read the transcript for this and other Community Broadband Bits Podcast at muninetworks.org/broadbandbits. We want your ideas for the show. Email us at podcast@muninetworks.org. Follow Chris on Twitter. His handle is @CommunityNets. Follow muninetworks.org stories on Twitter, where the handle is @communitynets.org. Thank you to the group Forget the Whale for their song I Know Where You've Been, licensed to creative commons and thank you for listening to episode 205 of the Community Broadband Bits Podcast.