This is episode 210 of the Community Broadband Bits podcast. Chris speaks with Al Crowser, the general manager of the electric utility in Alexandria, Minnesota. This community has provided Internet service to local businesses for years. Listen to this episode here.
Al Crowser: If your community decides they want to have their local government unit who probably has a very good track record on providing services, to provide that service, I think it should happen.
Lisa Gonzalez: Welcome to episode 210 of The Community Broadband Bits Podcast from the Institute for Local Self-Reliance, I’m Lisa Gonzalez. Every once in a while we're able to touch base with a community that we’ve not profiled before that’s been serving local businesses with municipal fiber connectivity for a number of years. This week it’s ALP Utilities in Alexandria, Minnesota. Chris talks with Al Crowser, General Manager of ALP Utilities, who share the history of how the community got involved and bring connectivity to Alexandria and surrounding towns located in the central part of the state. Al explains how the municipal utility has evolved to now offer fiber services to local businesses and how they've done it slowly methodically. Check out their website to learn more at ALPutilities.com. Now here are Chris and Al Crowser, General Manager of Alexandria’s ALP Utilities.
Chris Mitchell: Welcome to another edition of The Community Broadband Bits Podcast. I’m Chris Mitchell and today I'm speaking with Al Crowser, the general manager of ALP Utilities in Alexandria, Minnesota. Welcome to the show.
Al Crowser: Well, thank you for having me.
Chris Mitchell: Tell me a little bit about Alexandria. I’ve been through it, but I’m guessing most of our listeners have not.
Al Crowser: Alexandria is a gem of Minnesota. It’s in a lake region of the 200 lakes in our county. It has good manufacturing, good jobs, good education, it’s the tagline for Alexandria. “It’s easy to get to and hard to leave.”
Chris Mitchell: What do you have, like about 15,000 people?
Al Crowser: We do. The sign says 13,000 but within downtown Alexandria, there's about 20,000 people within 5 miles.
Chris Mitchell: And now at the utility, tell me all the different things that your utility does.
Al Crowser: We have three different business units at ALP Utilities. One is electricity which is our largest unit. Second is a water service, and third is a business communications sector.
Chris Mitchell: Let's push into the business communication services. For how long has utility been involved in any kind of telecommunication services?
Al Crowser: Well, when you talk about any kind of telecommunications we go way back with a copper system that we tied our substations together with and all utilities have had that for many, many years for communications, but you're probably talking more recently about Internet access and such.
Chris Mitchell: Sure.
Al Crowser: We started in the mid-90s with a partnership with our local rural electric cooperative where we provided dial-up service in the community because quite frankly, the incumbents here, the phone company and the cable company, were not providing service for Internet. Our community including the chamber of commerce and the economic development commission begged us to get into the Internet business so we did, and we were reluctant but we're happy that we brought it to the community.
Chris Mitchell: How many subscribers did you have on that dial-up business?
Al Crowser: We had about 6,500 subscribers. Most of them were in Alexandria. Some of them were in other communities that weren’t being served by the incumbents, including the Long Prairie, Minnesota, and Granite Falls, Minnesota.
Chris Mitchell: Given the population size at that time, you must’ve had just about everyone who’s on the Internet getting on through you.
Al Crowser: Yes, they did. I think we picked up most of them for dial-up, that’s correct.
Chris Mitchell: At a certain point though you started building fiber lines out. Let's just jump ahead
to that: What brought that on?
Al Crowser: We did. As a utility we wanted to rebuild our communications system to our substations and we decided that fiber optic would be the way to go for high-speed re-lane and things like that so we built the fiber optic cable to our substations, also to our water treatment plant and to wells around town.
Chris Mitchell: I'm curious. You could've probably paid to lease those services. Why does it make more sense to build your own?
Al Crowser: With a utility, we've always had the independent spirit to do things ourselves and be responsible for things ourselves, and we knew that we would have control over how well the communication system went in and how well it operated.
Chris Mitchell: I guess that plays into perhaps a larger question which is what do you think the proper role for local government is when it comes to Internet access?
Al Crowser: I believe that there is quite a huge role that can be with the public sector in providing Internet access or communications. I think you could draw the analogy that nowadays communications, use of the Internet, is just as important if not more important than roads and bridges and that other type of infrastructure. If a community decides they want to have their local government unit who probably has a very good track record on providing services to provide that service, I think it should happen.
Chris Mitchell: You already have a number of business customers. What do you think separates you from other choices that they would have because, at this point, the cable and telephone company I’m sure that they do have some kind of Internet service and yet your business customers want to stick with you.
Al Crowser: That's correct and I think it’s the local control aspect of it. If we ever have a problem, which we rarely do, they can walk right into our office and grab us by the neck and say, "Hey fix this." It’s never that severe of course, but I think they enjoy the local control. We're also not for profit. We're government. We charge a margin but that margin is just plowed back into the infrastructure. We don’t need a rate of return for our investors. We just provide a service, a good service at a low cost, and they enjoy that.
Chris Mitchell: There's actually an article I saw recently I think that really brings that message home regarding local service versus a big cable company. It was Comcast actually in an area in which they had strung a cable across someone’s backyard, and in this person’s backyard, they were not a Comcast customer. The cable hung low and when she went to sell her home, it was a problem because it lowered the value because it was an awkward cable. Every time she'd call Comcast, they didn’t know how to deal with it because she wasn’t a customer. They didn't have an option in their database. From this call center, probably in South Carolina, or who knows where it was, they would basically say, "Oh, yeah. We'll take care of it," and then forget about it. That doesn’t happen with you guys. You guys can just send someone over to check it out.
Al Crowser: That’s exactly right, and usually within minutes we do that. The furthest edge of our service territory is 10 to 15 miles away from the headquarters. We can respond quite well. Another interesting thing that happens here is that we have people come to us to sign up for electricity and to sign up for water and so forth, and the customers that are coming are having a difficult time figuring out, "How do I get my phone hooked up," or "How do I get my cable TV hooked up," and we give them the eight hundred number and I’m not positive of this, but I think the 800 number spells 1-800 black hole. Investor-owned utilities are just another model and I make fun of them. They make fun of us, and they’re just different but I think local control through a municipal nonprofit with high reliability and good service is the way to go.
Chris Mitchell: I know that you’ve probably heard this criticism and I know that it's not true, but I’ll make it for the sake of being provocative. Some of those big companies will claim it's not fair for you to be in this business because you’re just using so many taxpayer dollars and that’s not fair for them to compete against that.
Al Crowser: Yeah, that is absolutely untrue. We are a municipal electric and water and communications business. We get zero tax money. In fact, we send a payment to City Hall on our sales that far exceeds what our city would get from private enterprise. It’s called a payment in lieu of tax. For our small utility, the City Hall gets over million dollars from us. It's not a tax but we do support the city and we do actually support the tax base as opposed to draw any taxes.
Chris Mitchell: From what I’ve seen, often, if it were a tax you would be the biggest taxpayer or close to it in communities. A lot of times municipal utility, that payment is one of the largest sources, single sources of revenue.
Al Crowser: It is indeed and it represents perhaps 10%, I'm talking about all of our units. It represents about 10% of the cities general budget.
Chris Mitchell: So if you can't use taxpayer dollars, how have you financed your fiber network extensions to the businesses that you serve?
Al Crowser: Basically we just pay as we go. We grow as we have margins. We have not borrowed a penny one for our fiber-optic system and we have been building out slowly since 1995, but there's no debt associated with that sector of our business.
Chris Mitchell: Do you build opportunistically, if you know that there’s going to be another project or the street's going to be torn up and that sort of thing, or do you build based on a predetermined plan that’s just sort of you know that you want to get from point A to point B in year 2017?
Al Crowser: I would say it’s a blend of each. We have kind of a master plan of what areas of the community we want to get into, where we want to loop, but we also react to the businesses that want our service now. It’s a blend of the two.
Chris Mitchell: You said you focused on fiber optics but you have had some experience with wireless. Can you tell me a little bit about that?
Al Crowser: We had dial-up and at one point were excited when it went to a 56K modem, believe it or not.
Chris Mitchell: Oh, I remember it.
Al Crowser: Okay, all right. You sound younger than that.
Chris Mitchell: I started around I think it was 9600 baud so I didn’t experience 2400 baud, but I’ve experienced a fair number of the modems.
Al Crowser: We were in the dial-up business and we decided that, our customers decided they wanted more speed, so our next up was to go to wireless Internet. We went to 900 Mhz, unlicensed wireless connections, and did not have a good experience with that. We signed up quite a few customers but our reliability was not good just because of the nature of wireless and the nature of unlicensed wireless for sure. Over time, first of all, we sold our dial-up’s. We sold our wireless to another carrier, made some nice money on that and because we didn’t see a future in either of those, we see a future in the fiber-optic cable because quite frankly, the theoretical limits of fiber-optic cable have not been met by electronics yet. That’s quite future proof and we're always able to bump up how much bandwidth our customers need and I don’t see an end in sight.
Chris Mitchell: The thing about fiber of course is that it can be exposed and now as I understand it about I think it’s either 60 or 40% of your lines are under grounded but you're in midst of a major effort to put everything underground. Is that right?
Al Crowser: That’s true. We are for our electric system in our communication system would of course follow that is that we are under grounding all of our electric distribution lines over a period of the next decade or decade and a half. It kind of depends on how much we get done every year and what the bids come in at. We've got to plan to do that and we're about three years into it, and in fact on the electric side, our reliability has increased because we first replaced our poor cable, our older cable and so there's less outages to date. With that, our fiber-optic cable will go underground. That won’t necessarily improve the reliability of that because it is very high even what we put on poles is ADSS cable, single strength or super-strength or something like that.
Chris Mitchell: That goes up in the ... You get to put that in the electrical space. That's one of the major things that makes it different from other fiber. You don't have to worry about changing out the poles or anything because you, as the electric utility, get to use the electric space.
Al Crowser: Our electric sector though charges our communication sector for that pole attachment and it really isn't in the electrical space. It's in the communication space.
Chris Mitchell: One of the reasons I ask about the under grounding is because I lost power last week for 24 hours. Fortunately, no one was harmed but one block away from my house a tree that was quite a distance away from the power line fell and was pushed by the wind through the power line. Along with many other people in Minnesota in those vicious storms we had and it was just reminding me of how it seems a little crazy that more than 140 years after electricity started running light bulbs, it's still up in the air where it's susceptible to the elements. That's my own little crusade. I’ve been out through Fort Collins, who I think I will actually be next week’s guest and they’re just finishing up an under grounding project in Colorado. It's just so beautiful. It’s really beautiful when you don’t have to see all the wires around, I think. What I guess I'm curious about is when you’re under grounding in areas where you don’t have fiber, presumably that gives you an opportunity then to put in a conduit or other things for future fiber.
Al Crowser: Yes, we are putting in the incremental cost, doing that is very low. If you get the trench over or your plowing. We're putting in communications conduit in many places, at least in the places where we have mainline. We're not putting it into residences or anything like that. Yes, we'll have conduit in there and if we use it, that'll be great. If we don’t, we're not out of much money at all.
Chris Mitchell: Sure. I usually assume that even if used only 25% of it, you'd probably have a terrific savings.
Al Crowser: Yeah, I would think so.
Chris Mitchell: So I’m curious. Are you just foreclosing the possibility of doing residential service in the future then or what’s your thought process?
Al Crowser: We don’t have that as a definite plan. It could happen. The thing of it is is that residential in this community is brutal from a business standpoint as far as competing. If the need arose, if there was not good residential service, we would get into. We are also being very deliberate, as I mentioned before. Our business model is to go slow and pay-as-you-go. Don’t borrow any money. It could be deployed, but it might be a long time from now.
Chris Mitchell: Okay. Well, we really appreciate you taking the time to talk with us and to give us a sense of how you’ve been thinking about this and connecting the businesses, so thank you very much.
Al Crowser: Thank you for having me again.
Lisa Gonzalez: That was Chris and Al Crowser, general manager of ALP Utilities in Alexandria, Minnesota. You can access the transcript for this and other Community Broadband Bits Podcasts at MuniNetworks.org/broadbandbits. Email us with your ideas for the show at firstname.lastname@example.org Follow Chris on Twitter. His handle is @CommunityNets. Follow MuniNetworks.org stories on Twitter where the handle is @MuniNetworks. Thank you to the group Roller Genoa for their song "Safe and Warm in Hunter’s Arms" licensed through creative commons and thank you for listening to episode 210 of The Community Broadband Bits Podcast.