Transcript: Community Broadband Bits Episode 223

This is episode 223 of the Community Broadband Bits podcast. Eleven communities in Northern Utah are now served by a regional open access fiber-optic network, UTOPIA. Perry City's Mayor Karen Cronin and UTOPIA's Executive Director Roger Timmerman join the show. Listen to this episode here.

Karen Cronin: We don't have the money that some of the lobbyists are getting from big companies, but we have a voice and I think that our legislatures will listen to local voices if they have the courage to step forward.

Lisa Gonzalez: This is episode 223 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. The Utah Telecommunications Open Infrastructure Agency, also known as UTOPIA, began serving north-central Utah in 2004. The regional open access fiber-optic network has had its share of challenges since launch, but has slogged through them to now bring healthy competition to residents and businesses in 11 communities. Joining Chris this week are the mayor of one of the UTOPIA cities, Karen Cronin from Perry. Roger Timmerman, executive director of UTOPIA, is also part of the conversation. Our guests share stories about how competition has benefited local businesses and residents. They also describe infrastructure sign-up choices they have as property owners in a UTOPIA community and what it's like to have more than one or two ISPs at your feet. Now here are Chris, Mayor Cronin from Perry, and Roger Timmerman, executive director of UTOPIA.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Chris Mitchell. Today I'm speaking with two wonderful guests from the state of Utah. Roger Timmerman is the executive director of UTOPIA, the Utah Telecommunications Open Infrastructure Agency. Welcome to the show.

Roger Timmerman: Thank you. Thanks for having me on.

Christopher Mitchell: Perry City mayor, Karen Cronin. Welcome to the show.

Karen Cronin: Thank you. I'm delighted to be part of the conversation.

Christopher Mitchell: I'm excited to talk more about what's happening in Utah today. You've all been trailblazers in open access approaches. Roger, I think you were only of the early trailblazers who's now back with UTOPIA. Today we'll talk about the results, particularly in one of the UTOPIA communities, Perry City. Let's start there. Mayor Cronin, can you please tell me about your community and the internet access you have there?

Karen Cronin: Yeah. Let's start with what the community is like. Perry City is a small city, about 5,000 residents. It's located about 50 miles north of Salt Lake City. Six months ago we had very limited options for internet. We had some of the neighborhoods who didn't have any option except for dial up. At my house, we were on a satellite system where I was getting 5Mb speed. Fast-forward a few months and we were able to connect into the direct line with UTOPIA, the direct fiber line, and I now have upwards of 250Mb of speed, as does the whole city. The city was built out in less than four months. We've gone from a dial-up system to the cutting edge of what's available.

Christopher Mitchell: Well, that's remarkable. I'm sure that there are many people listening who would just love to have that kind of capacity available. Roger, can you help fill in some of the gaps for people who might be unfamiliar with UTOPIA? What is it?

Roger Timmerman: UTOPIA, we're a group of 11 cities. Perry City is one of those cities. These are cities that felt like they were not being served by the incumbents. Just wasn't enough options. They felt the negative impact of businesses leaving their communities in some case and just not offering the type of connectivity that they felt was needed to develop businesses and residences. They got together, they created UTOPIA and UTOPIA's an interlocal governmental agency, which is made up of these cities, and they built a massive backbone to connect these cities together and can collectively bond for the construction and operations of this network. The reason they did it that way was if you think of a city the size of Perry City, it's a great city, but it's not very large. The ability to put into place the fiber of the home system and operate that, get providers in there, it would be very difficult for just one small city to do. Collectively, the cities could get an economy and scale together to attract service providers, to get an efficiency of operations that would make this work. UTOPIA's had a difficult path. Initially, it started up and ran into some funding obstacles. The cities have since decided, let's fix some of these things and move forward. It was about five or six years ago, we took down a new model and took down additional debt and with that we've been very successful so for the last six or seven years UTOPIA has actually been able to build networks where the revenues from the builds of those networks are covering all of the debt service for the cost of building those networks and so we are in a great state now where we are now covering all of our operational expenses and all of the incremental debt we've taken justifies and sustains the growth of the system. Well, Perry City is one of these cities that's benefited from that in the sense that it hasn't really cost Perry City any additional money other than their original membership in the system and the collective funding of the cities but we've been able to build out that entire city and we're building out very rapidly in other cities in parallel. The nice thing about Perry is the whole city is covered. They can all get the same gigabit service. We install gigabits to homes and businesses typically. Larger businesses will get 10 Gig. Some very large connections we support are 100 Gig. In a city like Perry, it's very rural, but they can attract enormous investment from a data center or a large business or an industrial partner or something because we can deliver 100 gigabit anywhere in that city and actually offer that in a redundant way because of this redundant backbone put in collectively by these cities.

Karen Cronin: In Perry City we have a great number of home businesses. The demographics of Perry City, although it's small, it has the highest education rate for its' members and a lot of those people work from home. Having this option has brought even more people into the city and we have people calling and telling me that they have now had their bosses ask them if they can work from home because their home connection is faster than their at work connections and they get more done.

Christopher Mitchell: That's remarkable. I always like to hear that. I have to say that one of the things I love about UTOPIA and Roger, I'm sure you can't pick favorites but I can, I love that UTOPIA gives small providers like Xmission an opportunity to have many more customers. Xmission has been a guest on this show before, I think they have wonderful privacy policies, very bull-ish. I like seeing cities that have small, historic ISPs like Brighamnet also being able to expand and get more customers and thrive. I think that's an important role from my point of view, that UTOPIA really allows local businesses to be very competitive with the big companies with Comcast and CenturyLink that I happen to have here, where I'm recording this and I know you have out there, that don't always meet local needs in a way a local provider can.

Roger Timmerman: I agree. That's a major part of why we do it the way we do it. Open Access is not easy and it's taken quite bit a of time for UTOPIA to have a good, stable, competitive environment of providers and today we have 10 companies that compete residentially and about 25 that compete on the business side of things. Perry by itself even if they had fibers at home they may not naturally attract competition on that system but because of the scale of UTOPIA it's big enough to attract this level of competition and enable lots of these local providers and also some bigger providers to all kind of compete under a fair fiber infrastructure put in place by some of the cities.

Karen Cronin: That point is so important because it creates such a win-win for the residents by having an open network system. It creates the competition and it requires the service to be great and the price to be competitive if they are going to stay on the system and be competitive but it also allows like you said local businesses to be able to play at the same arena that some of the big businesses do and have a fair shake so it is a win-win all the way around.

Christopher Mitchell: Mayor Cronin, do you know of any personal anecdotes of people who have talked about how they are amazed that Perry City has this incredible connectivity available to them and it's enabled them to succeed in ways they might not otherwise have been able to.

Karen Cronin: I can tell you about a business that produces things from the home and then sells them out. They were telling me that before their Internet power didn't allow them to have the mass marketing they wanted and be as responsive and have the service level that would sustain their business. Since they've been able to connect to UTOPIA and have the ability to shop around for what suited their business best as far as a provider, they've been able to see their Internet sales increase dramatically.

Christopher Mitchell: Roger, I'm curious. If I'm a resident or a business in Perry, getting connected to you is just a little more different to what most people are used to. Can you walk me through my options as a homeowner on how I'd possible connect to Utopia?

Roger Timmerman: If you live in an area where UTOPIA is available, you can go to our website, put in your address, and it will pull up and show you, here are the services available to you from 10 different companies. It's a shopping cart of services. So, what happens is you sign up for the infrastructure from UTOPIA and we present the retail offerings from our partnered service providers so you kind of sign two agreements. You're getting infrastructure from the city and UTOPIA collectively and then Internet or phone or video or whatever those services you want bundled from the service provider. So you, two pieces and then how you pay for your fiber connection, a lot of our customers will say, "well, I'll just lease that monthly for 30 bucks and there's a 2 year term so it looks a lot like what you'd get from other options". We have some people who take a different option and that's where they essentially own their fiber connection. They pay up front a larger amount, $2,750 is actually the amount and then they never pay for it again. They own their fiber and then it just becomes, a very low bill because then they're only paying $35 to their service provider and it'll never go up after that. If you're leasing the connection from us, it starts at about $65 a month for 250 Megabit connection. I say that as an example of what we have right now but we don't control those prices. The beauty of it is that it is competitive and those retail providers are free to change their prices whenever they want to be competitive. We struggle because we try to publish the pricing and then they change it. It's a struggle but it's also the beauty of competition is that they're constantly coming up with different promotions and lowering and raising and adding options and they have the freedom to do that and that's one of the beauties of open access.

Christopher Mitchell: One of the things as an outside observer that's impossible to miss is you have, in your region, a nonprofit organization that I suspect largely gets contributions from CenturyLink and Comcast that paints a picture that people in Utah are very frustrated and angry that UTOPIA wasn't able to pay its way in the way it was expected. Now, Mayor Cronin, I'm just curious. Do you get a sense from your citizens, are they glad UTOPIA exists or would they prefer that they didn't have these options and they didn't have to hear these claims that the network is not good?

Karen Cronin: I will be honest with you. As Roger has mentioned, it's had a tough start and it was a new idea, a very forward thinking idea and for the first few years we were paying into UTOPIA collectively as one of the original 11 member cities and we were getting 0 service and that was hard. We still get a lot of comments from residents but about 3 years ago we as the 11 cities came together and said we need to make this system work and we talked through several options and like Roger said we got to the point where we were able to start funding build out and things. Once we had the build out and once we took it to our residents which was last February and told them where we had come, I have heard nothing but positive, nothing but positive since February when we rolled it out. We had a town hall meeting, we told them where we had come and the obstacles we had overcome and at that point we were able to roll it out that it was totally optional. If people wanted it, great. If they didn't there wouldn't be any extra assessments to them. Once they saw the competitive advantage it gave them because of the number of people on the network and having the fiber direct to their home it has been phenomenal excitement in the city.

Christopher Mitchell: I'm not too surprised to hear that. I've seen that in other places as well. This is an infrastructure that's going to last a long time. I look back, a number of the airports that cities built many decades ago, they took a long time to break even but people were generally glad to have them available. One of the things people often realize is you were among the first to be doing this. The lessons you learned really helped a lot of other communities to be successful in terms of structuring their programs and learning lessons about how to move forward. So, I think, in some ways, the mistakes you made were a bit of a public service in terms of teaching others a lesson. One of the other things I want to talk about as we are running out of time with the time we have left, some of the problems you faced weren't your fault. The state made it hard on you. Roger, I'm wondering if you can tell us a little about the ways of which the state, I think, acting on behalf of the big companies that you're competing with, actually put its thumb on the scale to make your life more difficult.

Roger Timmerman: Yeah, one of the things was, the prohibition on us offering services directly. We like the idea of open access but it would be possible to provide some of the services directly while still allowing competition on the network. It was a big curveball at the UTOPIA cities to get legislation that showed up from a legislator that wasn't even in the cities involving UTOPIA that put all these restrictions on what cities could do and all this additional process and red tape that they'd have to go through to get the product in place. The legislation, what has been used as an example, since then, of how to go buy some legislation. It wasn't even in the conversation in Utah among citizens and legislators, it was brought in and given to legislators to push in behalf of a private interest.

Christopher Mitchell: Brendan Greeley wrote a great article in Business Week many years ago and it's titled, "Psst... Wanna Buy a Law?" If people Google that, I have no doubt they'll find it. It's exactly how you describe it and it's worth reading, but please continue.

Roger Timmerman: That was the initial obstacle. Open Access, we like it, it does provide a scalability issue. There's less dollars coming to UTOPIA to cover our investments. It's a good model, it's a more difficult model. The biggest problem UTOPIA has had has been financials. It's been a problem for us. Since that time, it seem like every year or two years another piece of legislation shows up trying to further restrict what we can do and it's a fight. We don't have a budget like the private companies do to go and lobby and push for influence at a legislation level. It's really an interesting contrast because among residents, populations in our cities, and businesses even, UTOPIA is extremely popular and the incumbents are some of the most hated companies in America. Along legislators, the incumbents are really popular, you can imagine why that is because of, whether it's campaign contributions or influence among different groups.

Christopher Mitchell: Weekly golf trips?

Roger Timmerman: It's night and day between the citizens and legislators and what their interactions are with the incumbents.

Christopher Mitchell: Mayor Cronin?

Karen Cronin: I remember a couple years ago when there was a piece of legislation that was going to pass that was going to greatly affect the way we could promote the UTOPIA's, the 11 cities and the 11 cities banded together and went to talk to the legislature. It was because of that, the local involvement that the legislators listened and gave us a bit more time and didn't pass that legislation. I can't emphasize enough how important it is -- if people want local control then the local elected officials need to be involved and make things happen. We don't have the money that some of the lobbyists are getting from big companies, but we have a voice and I think our legislators will listen to local voices if they have the courage to step forward.

Christopher Mitchell: I think that's a really good point. It's not enough to just be right, you have to make sure you're raising your voice up as local elected officials and just citizens to say this is our point of view. Because, as we discussed, the legislators, they hear from the big companies every day. They need to hear from multiple constituents every day on these issues as well in order to even just think they're similar in terms of important, in terms of policy preferences. I think we're about out of time but I'd love to give you another chance to say anything else you'd like to say as we finish up our discussion. Let me start with you Roger.

Roger Timmerman: It's an exciting time in the space of municipal fiber. What we've seen in our own area is that the demand for this service is higher than it's ever been. We started this thing back in 2002 and back then people were still trying to figure out what Fiber was and what the benefits were and there was a major population that didn't use it. Now it's a given. Everyone wants Internet connectivity and they don't just want it, they want good speeds and good service. Over time it's been legitimized and we've seen that in the form of increased demands and then we see, where's the rest of the industry, where's the incumbents and other options and it seems that they're actually falling further behind. We go back ten years and these guys weren't the most hated companies in America. Things have gotten worse for them, not better. Rather than upgrade and compete, we see an increased and deliberate effort to stop municipal progress building Fiber projects, and so it's good in the sense that the success and demand for municipal fibers have increased but there's an increased threat because there's a lot of work being done to preserve incumbent interests. It's great, we're seeing successes here. Our financials are better, we're in a position that we're actually growing faster than we have in our whole history. Things are good. We have other cities looking to partner with us in other ways and that wasn't a conversation we weren't able to have because of the past difficulties. I think you'll see UTOPIA continue to grow and be successful and I think you'll see efforts like UTOPIA across the country and have success.

Christopher Mitchell: Parting thoughts from Mayor Cronin?

Karen Cronin: I think in the world we live in today we are seeing the rate of technological advances is at warp speed. In order to be competitive and stay at the forefront, we need to allow the free enterprise system to work and not put legislation in place that may limit that free enterprise system. I would put Perry out there as one of the success stories. A small rural community of 5,000 and yet now we have the capability through the UTOPIA network and the open market to be able to have 100 Gigabit connections and redundancy and multiple providers and that puts us on the map to be able to support some of the biggest companies that are looking at trying to locate in the West. It's a great thing and we've benefitted enormously.

Christopher Mitchell: Thank you both for taking time to come on and share your experiences and the message of hope coming out of Northern Utah.

Karen Cronin: Thank you for allowing us to talk to you Chris.

Roger Timmerman: Thank you Chris.

Lisa Gonzalez: That was Mayor Cronin from Perry and Roger Timmerman, executive director of UTOPIA talking with Chris about the Utah Telecommunications Open Infrastructure Agency. Check out their website at UTOPIAnet.org to learn more. We also have a number of stories about UTOPIA on MuniNetworks.org. Remember, we have transcripts for this and other Community Broadband Bits podcasts 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's stories on Twitter, the handle is @MuniNetworks. Subscribe to this podcast and all the podcasts in the ILSR Podcast Family on iTunes, Stitcher, or wherever else you get your Podcasts. Never miss out on our original research by also subscribing to our monthly newsletter at ILSR.org. Thank you to the group Mojo Monkeys for their song “Bodacious” licensed through Creative Commons. Thanks for listening to Episode 223 of the Community Broadband Bits Podcast.