Transcript: Community Broadband Bits Episode 220

This is episode 220 of the Community Broadband Bits Podcast. CEO David Corrado of Medina County Fiber Network in Ohio joins the show to discuss the role of the county's fiber infrastructure and their work with Internet service providers. Listen to this episode here.

 

David Corrado: It is the next infrastructure. It is needed for economic development just as a waterway, or a highway, or an airport.

Lisa Gonzalez: This is episode 220 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. Medina County in Ohio is a growing community, in part because it’s located between Cleveland and Akron, but also because it has invested in fiber optic infrastructure. The county has aggressively pursued a more connected environment for economic development, and it’s working. In this interview, Chris talks with David Corrado, CEO of Medina County Fiber Network. He discusses the challenges, progress, and the history of how the community came to have its great asset. David also describes the role the county place and how they work with Internet service providers that use the infrastructure to serve customers. You can learn more details at medinacountyfibernetwork.com. Be sure to stick around after the conversation for a special treat at the end of this week’s show. Now, here are Chris and David Corrado, CEO of the network.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I’m Chris Mitchell. Today, I’m speaking with David Corrado, the CEO of Medina County Fiber Network in Ohio. Welcome to the show.

David Corrado: Thank you Chris. How are you today?

Christopher Mitchell: I’m doing well. As we’re just joking a little bit about, and I actually I screwed it up in the first attempt, but it is Medina spelled M-E-D-I-N-A, which could be confused with Medina and that happens sometimes. Tell us a little bit about the section of Ohio you’re in. What kind of communities do you have?

David Corrado: We are about 30 minutes south of Cleveland. Medina County is one of the counties that had extensive growth in the 80s and 90s, about 75,000 households, roughly 8,500 businesses, third fastest growing county in the state of Ohio, so it’s a fairly affluent county with many businesses looking to locate here because of the nice location between Cleveland and Akron.

Christopher Mitchell: You were one of the earlier members of Next Century Cities and one of the rare county members which there is a few. That’s something that you got into pretty early, it seems like.

David Corrado: We were the 50th member of Next Century Cities. As far as the city’s counties go, you look at municipal networks, predominately they are city based so we are a little larger, 151 miles. We have three larger cities within some smaller towns that are also within the county. The demographics and the way that we run the network is a little different than some of the cities that people may have heard about in the past.

Christopher Mitchell: Sure, and we'll get into that in a minute. There’s one other thing that I thought was pretty interesting and that’s your email address. You guys are Fiber County. Is there a story behind that?

David Corrado: We are, we are. Our marketing department said, “Let’s set up a domain which really talks to exactly what we’re doing.” We actually have a sign that says Fiber County USA. The colors of the sign in the lettering are the colors of each of the cities that are represented in the county. Our domain is @fibercounty.com, so that is exactly what we’re trying to do here.

Christopher Mitchell: Excellent. Tell me how the county got started with fiber optics.

David Corrado: About 10 to 15 years ago, the county realized that many corporations were asking for connectivity outside of the county as we went to a more global economy. They started to lose some businesses that could not exist on DSL or cable. They started, the county started to put together an analysis to look at what would be needed, and basically it’s a very standard approach. It is the next infrastructure. It is needed for economic development just as a waterway or a highway or an airport is put in for towns to grow and accumulate business and individuals. That’s what they realize that they had to build this fiber infrastructure to attract new services into the county.

Christopher Mitchell: Often, when I've heard of counties doing something like this, they would put it under a CIO type position within an existing department that already dealt with technology. It sounds like you may be did things a little differently.

David Corrado: It is a little different here in Medina County. There really is not a definitive central IT staff with the CIO, the different functions within the county have different IT support staffs and really what was done here is that this project was given to the Medina County Port Authority which is basically a sub government agency that handles large projects for a County usually on an economic development basis. They have a little bit more leeway than, say, a government does. In this case, the Medina County Port Authority was the governing body that was working for the county. That is how we are lined up today.

Christopher Mitchell: You started off, you built some fiber and we’re going to get really into the savings and the benefits, but one of the things that strikes me and I think is tied up in my history with you is that we first started communicating at a time when I think you had this great fiber asset, and it was really underutilized, something that’s changed since then fortunately. Can you tell us a little bit about the growing pains that you went through?

David Corrado: Well, the challenge as with and I’ll say this is … We’re not considered rural by populace but still we have many small businesses and Medina County still has a strong agricultural component to this economy. In any of those type of geographical locations, you still have the cable modem or the DSL being extended from the household into the business. Many people did not know what fiber brought, so it was a very large reeducation of what could be done for the companies. There were many companies that their network would go down once a month. They would lose their Internet or lose their phones. That was acceptable because they didn’t know that anything else existed. We had to reeducate constantly show what could be done, get consortiums together. We still have a long way to go but we are making some good traction of course starting with larger companies. Our latest is that we hopefully can partner with the Fiber-to-the-Home partner because we believe that that would definitely sort of solidify what fiber can do on residential basis.

Christopher Mitchell: That’s a good point of clarification, I think, because I was not very clear. Your county network does not reach out to the home. You’re not a service provider. You just make sure people have the basics of what you do.

David Corrado: We are the railroad tracks. Medina County Port Authority decided that they did not want to get into business of competing with carriers. What they did is they put the fiber network in. It is both lit in dark services. Today, we connect with three carriers. We'll have three more carriers connecting here within the next two months. Basically, what we do is we try to position the carriers. They can either sell directly into the customers or we sell their services, but the carriers provide everything above the transport. We strictly do the transport to the connection for the carrier so we're the last mile. We monitor that just like a carrier would. It has definitely broken down the economic barriers of a carrier having to come in and build the fiber themselves. We are starting to really get momentum for carriers saying this is a great opportunity, there’s no financial risk for us, there’s no cost to do an NNI connection with us and we help sell their services.

Christopher Mitchell: Do you want to just briefly describe what an NNI connection is?

David Corrado: Sure. It’s a Network to Network Interconnection or Network to Network Interface depending on who you're talking with. Basically, it’s a piece of our network equipment that sits on our network with high-speed fiber connection to a piece of equipment sitting on the carriers network. That’s where they deliver the phone services and the Internet services, firewall, managed services, anything that basically comes across the fiber network is delivered at that point. We have an NNI with each carrier and they are segmented so they don’t bleed over onto each other, and it works very well.

Christopher Mitchell: This is, I think, a good point of differentiation with some other approaches that counties and cities have taken, which is to say that let’s assume that I’m a small business and I'm on a street, some of those municipal and county approaches would go past the house or past the business and another business, an ISP could lease that connection to you, but then you would have to connect from the street to the business. Now, if I understand correctly, you will actually do that part as well if that’s the desire of the ISP.

David Corrado: That’s what we normally do. We have budgeted in our business plan to connect from the street into the customer premise with fiber so it’s complete fiber to the premise. We put in a piece of network equipment and then the carrier connects to our network equipment at the customer location. We deliver the transport back to where we connect with the carrier.

Christopher Mitchell: I want to get into some tips for others who might want to learn from what you’ve gone through. I guess, I’m curious if that was one of the things you learned was just that you need to go that extra mile. I think that might almost be a pun. You need to do that final connection possibly to get some of the carriers more interested.

David Corrado: You do. You need to budget for it. It is a big piece of your capital expenditure, so you need to make sure and the customer premise equipment that you’re putting in there, you want to do that so you can monitor and give statistics to your carrier. You’re playing two sides here. Your carrier is your customer and the customer is also the customer of Medina County Fiber. However, they signed their contract with a carrier and we invoice the carrier for the transport but we are also an advocate for that end user if they need to have something escalated to the carriers. It gives a support structure a little extra level for the customer. Again, as you said, it attracts more carriers because we are adding a little bit of a financial piece that would’ve kept them from coming into Medina County

Christopher Mitchell: Do you have any other suggestions for how to approach carriers, how to talk to carriers about this to encourage them to join a network like yours?

David Corrado: The key is a lot of patience. Sometimes it’ll take, it took us two years to get one carrier to connect. I wish I had some sort of key that could unlock the solution to it. Basically, what you need to do is you need to find out what carriers are in the area, what type of services are being delivered and then you need to research what other carriers outside your area have to deliver and find out if their plan has any type of geographical expansion. After you get your first two or three, then the others start to realize that there’s potential here. I think that’s the real big piece but it’s just basic tenacity. It’s basic block and tackling, lots of emails, lots of phone calls and get high up on the ladder as high up as you can go, and show it from a business case where it’s low risk, low financial investment by the carrier. In our case, we also have the entire county supporting this network also financially. It’s not going to go anywhere.

Christopher Mitchell: Great. As we transition into talking about the savings and the benefits, let’s just set a base for what those benefits come from and that’s how was the network financed and how is it supported.

David Corrado: The network was financed through floating bonds on the open market, federal bonds, recovery zone bonds, and government bonds. However, like any startup, it takes time for a business to become completely self-sufficient, fully sustainable. In that short term, our project plan is a five-year sustainable plan. I think if you talk to other network people, that’s an aggressive plan but that’s what we’re moving toward and we are on target. Any shortfall of paying back the bonds is backed by the entire budget of Medina County. The county has AAA bond rating and they’re very secure. They run a very good budget, a good tight ship. They then give that financial support but we are all striving to make the network self-sustainable so funds from the county can be there to help people and other areas too and have the network run on its own.

Christopher Mitchell: Let’s tackle some of the benefits then that are, I think, the reason why we see local governments wanting to take those steps. Let’s talk about some of the cost savings first maybe that are resulting from the network.

David Corrado: There are four or five major benefits, so let’s talk about the hard dollars. We average about $350 per month savings per customer. We have some customers saving in the thousands per month and other customers smaller ones saving $50 to $100. We are able through multi dwelling units or if we get a number of buildings close together where we can service the smaller customer and they get the chance now to have enterprise class network equipment, fully monitored, managed services, the stuff that only big companies could afford before. Much of that savings comes from voice, voice over fiber is much less expensive. The capacity of fiber allows you to deliver many more phone lines, or some people call it concurrent paths compared to over copper. It also gives you the capability to offer and I’ll use some technical terms here PRI, SIP trunks, analog, digital all over that fiber rather than having to change equipment or change the type of media, etc. That has been a huge benefit for many of our customers that have had these large expensive PRIs. Now, they can pay too for only what they’re using rather than having to buy a bigger product.

Christopher Mitchell: Right, and to be clear, those are customers that are small and medium-size businesses I’m guessing largely.

David Corrado: That’s predominantly correct. That is our demographic here in Medina County.

Christopher Mitchell: Have you seen any cost savings from any public facilities that you’ve connected along the way as part of building this network?

David Corrado: We do have 10 of the municipal buildings connected in a municipal ring. It’s not just connected point-to-point, but they have full redundancy which has been a big help for the network bringing on critical applications such as E911 that we have running communications dispatch to the police, the sheriffs, they’re all on high-speed fiber now which the network has only had one outage for approximately 20 minutes in the last three years. They are now bringing in voice for the E911 because of that. There’s been a lot of money saved. I haven’t quantified it from the public side because the network is owned by Medina County. They're using their own asset if you will but then they don’t have to use commercial, I would say there’s probably 10 to 15% savings as you know government has a fairly good state discount. The other piece of the public side is that we were granted $100,000 from the state of Ohio. It was a proposal that we wrote to connect the state agencies through the state of Ohio network or net which is built for research and public institutions so we can bring those services directly to state agencies. We're going to use that money to build out into those buildings to help save them money. That should be another 20 to 30% savings for them.

Christopher Mitchell: I think it can be hard to figure out how do you quantify the savings of a network that’s more reliable when you ‘re talking about 911 and things like that. I mean, being in Ohio, you can have some pretty horrible thunderstorms, you have some real challenges here and there, you hope that you never need it, but it’s one of those things that just like to remind people that you can quantify some of this stuff, but some of it is pretty hard.

David Corrado: Yeah, that’s very true. Part of it is not on the direct money but it’s basically on the type of environment you’re living in, how safe is it, how quickly can your safety forces respond to you and it’s your quality of life. Those are very hard to quantify in dollars.

Christopher Mitchell: But you have quantified many other things so let’s get back to some of those. What other benefits have you created through the network?

David Corrado: Well, we’ve seen the carriers that were here which are predominantly copper-based or coax cable providers. We've seen about a 10 to 15% drop in pricing across the board, so those people that are using the services still, or preferred those services, are also getting in a nice cost-benefit from that. In one case, when we were direct head-to-head competing with one of the cable providers, they actually came in with a 50% price decrease for about 315 users that happened to be an apartment complex. We’ve seen those savings at about as high as 50%. I know that for a fact because one of the people worked in the office where I’m at, and she came in and thanked me even though we didn’t win for getting her cable bill down. We have created that type of environment too, where competition now, companies and individuals are benefiting from it.

Christopher Mitchell: What kind of new jobs have you seen that you can tell have resulted from network-related activity?

David Corrado: We've generated about 50 new jobs, the majority of them coming from a company out of Australia who decided to come to Medina County rather than Cleveland. They have roughly about 30 people working there. The other jobs have been through expansions. More companies did expand, and fiber was important to them. We have some very large projects that have not signed on yet but it would be an all-new building in Medina County and we’ve already met with and some of their first requirements was a fiber infrastructure. That would be 2 to 300 jobs if those large structures hit. The sell-cycle is long and we’ve met with them over the past 8 to 10 months so where we keep working on that. Little by little, the economic cycle is starting to pick up.

Christopher Mitchell: When you talked about Fiber-to-the-Home earlier, I didn’t imagine that, did I?

David Corrado: No, you didn’t. When I took this job, Chris, three years ago, I started doing quite a bit of research. A lot of it, of course, actually comes through newsletters and podcasts, which I think are fantastic, help me ramp up. Then, of course Next Century Cities with Deb Socia’s information was also very helpful. I kept reading about all these cities starting with residential plans and Fiber-to-the-Home. I realized that it was something of a necessity. It was never really considered in the network. As I learned more and more, we started then reaching across the country, talking with many Fiber-to-the-Home providers. We've had a couple of them here already and they’ve done drive-throughs and they brought their executive teams. We’re just as anxious as everybody else. I think in approximately the 900 calls I’ve made to businesses over the last 3 - 3 1/2 years, at least 95% of those people have said to me, “When are you coming to my house?” There definitely is a demand for it. We just need now to convince the Fiber-to-the-Home carriers that we have a great opportunity here in Medina County and people are waiting for it. I get calls weekly from associations. Let’s say we have 100 houses and we want to talk with you. It definitely is something I would say, anybody putting in a municipal network, don’t ever lose that focus. Maybe that is the start off point even perhaps something that you work coterminously.

Christopher Mitchell: I have to assume that in that sort of a scenario, you would probably do a hand off to the carrier in the neighborhood. You would not be building up and down the alleys and connecting every last premise with county network at that point.

David Corrado: That is correct. We have 125 drop-off points around our network. We have already pulled all the parcels and we send that database to Fiber-to-the-Home carriers who overlay it on the fiber map for our backbone and where our drop-off points are. They can build their financial plan by how much they would need to build in the area. We are open for adding more drop-off points if need be to help the Fiber-to-the-Home carriers

Christopher Mitchell: Great. Was there anything else that you wanted to make sure people knew about Medina County and the fiber network?

David Corrado: Like I said, a rural setting, we have a public square but it’s a place where now that the fiber has come to is a great place to bring your company. There are a lot of tax credits, CRAs, the cost of living is low. We have a couple companies already that connect to Austria and to Switzerland. If your parent companies is overseas, there’s no problem, we can take care of that for you, great school districts and if you’re Fiber-to-the-Home person, company listening to this, please give me a call and we would be more than happy to give you a tour and take you out to lunch. How’s that?

Christopher Mitchell: Sure. You can’t neglect to mention the reigning NBA champions being right there.

David Corrado: That’s right. Right there, Cleveland Cavaliers just a stone’s throw up by 71. You're right there at Quicken Loans [Arena] and you get to watch them. You can’t beat that.

Christopher Mitchell: Great. Well thank you so much for your time and for sharing your experiences.

David Corrado: Thank you Chris. I appreciate it and look forward to reading more of your newsletters and listening to your podcast.

Lisa Gonzalez: Thank you for listening to episode 220 of the Community Broadband Bits podcast. That was David Corrado, CEO of the Medina County Fiber Network in Medina County, Ohio sharing the story of a network and offering some tips for other communities. Remember, we have transcripts for this and other Community Broadband Bits podcast available at MuniNetworks.org/broadbandbits. Email us with your ideas for the show. Send a note to podcast@MuniNetworks.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 Mojo Monkeys for their song Bodacious licensed through Creative Commons.

Now, keep listening for the story of Pinetops, a small rural town near Wilson, North Carolina. You can also link to the story on PRX from our podcast page. Thanks again for listening. On Thursday night, September 15, the city Council of Wilson, North Carolina reluctantly voted to step along its municipal Internet utility Green Light to offer services in nearby Pinetops. The municipal utility began serving Pinetops this past spring after the Federal Communications Commission preempted North Carolina laws that prevented Wilson’s municipal electric utility from offering Internet access to communities outside Wilson County. In August however, the Sixth Circuit Court of Appeals sided with the state, and North Carolina again has effectively outlawed municipal broadband. When the state of North Carolina adopted the law in 2011, it provided an exemption for Wilson where Greenlight was already serving much of Wilson’s businesses and residents. The city of Wilson now has no choice but to stop serving Pinetops or risk shutting the entire network down. Pinetops, a community of about 1,300 could not get private providers to bring high-speed Internet to town. Slow, spotty, unreliable DSL was the best offered which kept the residents in the last century and was especially difficult for local businesses. When Greenlight came to town, the community immediately felt a positive impact. In addition to a number of new at home businesses that finally had the conductivity they needed to operate, existing businesses signed up to improve operations. The big family farm invested in a new potato distribution facility that required the gigabit connections they could only get from Green Light. Long-distance sales have jumped but Green Light service to the big family farm ends on October 31. Suzanne Coker Craig, a Pinetops Town Commissioner and a local small business owner says Greenlight gave her screen-printing business the ability to truly compete. She recognizes that the states barriers that prevent local authority are part of the problem.

Suzanne Coker Craig: This is a situation that Pinetops and other small towns in rural areas of North Carolina are not being served by private providers with high-speed good quality Internet service. We see this very similarly to how power was provided back in the 30s and 40s when rural areas couldn’t get power, local government stepped in. This is the same thing for us. We consider that high-speed quality Internet service in today’s economy is a utility. When you can’t have private providers willing to do this, why not let progressive municipal governments like Wilson help us out with this. We think this law is really a significant hindrance. Our areas are already struggling economically and we are losing population. This is only going to further that, it's not going to allow us to help ourselves grow and help ourselves pick ourselves up out of the economic slump that we are already in.

Lisa Gonzalez: Coker Craig says that the town is not taking the decision lying down. Immediately after the vote, the Town Board of Commissioners passed the resolution calling on the North Carolina General Assembly to repeal restrictive states barriers. Pinetops Mayor Steve Burress also appealed directly to Governor McCrory. They just started a new Facebook page NC Small Towns Need Internet Access. In addition, community leaders are planning more grassroots activities. They see themselves as a poster child for all rural North Carolina communities. This is Lisa Gonzalez with the Community Broadband Networks Initiative at Institute for Local Self-Reliance.

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