This is episode 228 of the Community Broadband Bits Podcast. Fiber Infrastructure and Right of Way Manager David Young of Lincoln, Nebraska, describes the city's work with local Internet Service Provider, Allo Communications. Listen to this episode here.
Listen to, or read the transcript for, episode 182 in which David Young, Mike Lang, and Steve Huggenberger discuss conduit policy in more detail.
David Young: Engaging your provider, engaging your community upfront and deciding what your model should be and then creating a plan and executing that plan is very important.
Lisa Gonzalez: This is episode 228 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez . A number of states have laws on the books that obstruct local governments from directly providing high quality Internet access to businesses and residents, or even partnering with local providers. Nebraska happens to be one of them. In Lincoln the community found a way to work within the confines of the law by using publicly owned conduit and creating a welcoming environment for private Internet Service Providers. As a result, Lincoln has entered into an agreement with the local provider Allo Communications who will use the conduit to build its Fiber-to-the-Home network. David Young, Lincoln's Fiber Infrastructure and Right of Way Manager talks with Chris this week. David discusses the early days of the project and how it has evolved. He also shares more information about the franchise agreement and more about the partner Lincoln chose. Be sure to take a few moment and listen to Chris' interview with David and several of his colleagues in episode 182 from last December. Now here are Chris and David Young, Lincoln, Nebraska's Fiber Infrastructure and Right of Way Manager talking about the community's conduit network and how they are capitalizing on it to bring better connectivity and technology to Lincoln.
Chris Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell. Today I'm speaking with David Young the Fiber Infrastructure and Right of Way Manager for the city of Lincoln and the public works department. Welcome back to the show.
David Young: Hi Chris, how are you?
Chris Mitchell: I'm doing well. I'm excited to speak with you again. Last time we had you on the show was the day after my son was born because he came a little bit early and I really wanted to get that interview in. I'm a little less frazzled today, although once again some traumatic events this week as we're recording the week of the election.
David Young: Yes. I did enjoy seeing your son at the Broadband Communities conference, good looking kid. It looks like he's very healthy.
Chris Mitchell: Yes. Yes, he's doing well. Now I wanted to note that since we spoke you've become a bit of a trade show hopper. You were at the NTIA in Big Sky Missoula where we served on a panel together, and then I think you knocked them dead here in Minneapolis for the Broadband Communities conference. I hope that people will feel that you're a more seasoned, more a big get for us now.
David Young: I think you're being overly kind. How much can you talk about broadband in front of a group of people who know a lot about broadband?
Chris Mitchell: I just wanted to see if I could start off by making you blush and be modest. We're going to talk about some more details that I've learned about the franchise you have with a Fiber-to-the-Home provider in your community that results from your system of conduit. I think people should start by listening to that podcast that we had done previously, it was in December of 2015. For a quick refresher, for people who aren't familiar with Lincoln, what have you all done to supercharge Internet access in the community?
David Young: Starting in 2012 the mayor and Public Works Department came up with a broadband technology plan. Basically the goal was to attract new carriers to the market and have those be very specific carriers. We wanted Tier 1, Tier 2 and Tier 3 carriers to provide competitive access to broadband for businesses. Under state law, Lincoln, or any city in Nebraska, is not allowed to provide municipal broadband. Lincoln took stock and figured out that what we could do is put in conduit system and lease out those conduit to other providers. We initially put in five miles of conduit in our downtown area as part of a revitalization project and started looking around and found 80 miles of abandoned waterline, probably 40 miles of abandoned waste water lines. We repurposed those lines into conduit systems and traffic conduit, old electric conduit, old natural gas lines, basically any pipe we could get our hands on and turned it into a conduit system that now is over 350 miles. We've leased that out to seven carriers total. When we got down to the last space we started talking about, "Gee, this is pretty successful, maybe we ought to look at Fiber-to-the-Home." We started working with different carriers and financing professionals to build a Fiber-to-the-Home with that last space in the conduit system. In December of last year we signed that agreement. Can you believe it's already been a year? It's been very exciting on our side, very busy.
Chris Mitchell: Yes, I can imagine. How much did the city spend in creating this asset?
David Young: In total about $1.2 million over four years. There was about 600,000 upfront in conduit expense and then staff time and maintenance and a $600,000 CIP, so a little bit more than about 1.2 million.
Chris Mitchell: CIP, that's Capital Improvement Program?
David Young: Yes, I'm sorry. Yes. For all those in the government, CIP is the Capital Improvement Plan, which is a six year plan that is how you allocate your capital dollars across programs like streets, water, sewer, those kind of things.
Chris Mitchell: If we ignore the new businesses that have come to town using some of this fiber that these carriers are leasing from you and if we ignore the better competitiveness of some of the businesses that were already in town, what are some of the direct benefits the city has had in terms of raising revenue from that 1.2 million that they spent?
David Young: If you're only talk pure money from the system we make $475,000 a year in lease revenue.
Chris Mitchell: That's like a three year payback then, just from that alone from today.
David Young: Right, and we've been making money since 2013. 2013 is 55,000 and then we had two more leases in 2014 and really 2015 was our banner year. Right now we're at 475, with the Allo project we're expected to be in the neighborhood of two to two point seven million a year by 2018.
Chris Mitchell: Allo is a local company, it's in Nebraska. I know in people in Colorado are familiar with it. It's incredibly well regarded by its customers from what I can tell. Tell us a little bit more about Allo, I think it's in a unique position there in Lincoln.
David Young: Allo is a Western Nebraska company. It was started by, they like to say, Nebraskans for Nebraskans. The city was meeting and doing presentations on Fiber-to-the-Home and the value of the community to various local organizations, building that community support for the program. We were meeting with financiers and talking to them and Allo was brought in and offered to competitively bid on the Fiber-to-the-Home project in Lincoln. We had another company, Bluestem, also bidding on the franchise. Bluestem is still in operation, they are building one portion of the city. We actually have three Fiber-to-the-Home projects going right now. Allo won the citywide franchise, Bluestem is doing a small neighborhood in Northeast Lincoln and then our incumbent provider, Windstream, has announced that they will upgrade 5,000 homes over the next two years in Southeast Lincoln to Fiber-to-the-Home. It's been very successful from a community planning aspect of partnering with the private sector to build this infrastructure, but it is a lot of work. It's hard to believe that we're going on our fifth year of operation.
Chris Mitchell: I want to clarify something with the franchise, which is I think sometimes people think of franchises as being exclusive. Now you talk about offering a franchise because of the limited conduit space, that's the franchise to use that conduit. A company like Bluestem, there's nothing stopping them from building to the rest of the city, they just wouldn't be able to use the same asset that Allo is using. Am I getting that correct?
David Young: You are. We had one space left in the conduit system and I will tell you, sometimes that space isn't even there. The conduit system is getting very full. It's been very successful. The last guaranteed spot in the conduit system, what we said was we wanted somebody to provide Fiber-to-the-Home services and in order to do that we wanted to franchise for that last position. Allo and Bluestem both worked with the city very closely. It took us about 90 days to come to an agreement and Allo was ultimately chosen to do the project.
Chris Mitchell: Now when you say there's no more room in the conduit, I'm assuming that over time you'll fix that, you'll be putting in extra conduit or you might be doing something differently now because it's not like this is the end of the conduit forever.
David Young: Correct. No, no, no, there's nothing to prohibit the city from putting in additional conduit, and we are. The new conduit system as we're building it out is designed for six carriers occupancy. All extensions of the conduit system that are performed by private providers are deeded over to the city and owned by the city. All the additional expansion, all expansion construction is now under the new standard of six pack of conduit system.
Chris Mitchell: We did talk about that in the previous show so if people want more detail I invite them to go review that. The transcript's on our website at muninetworks.org. Before we get into the franchise, which is where I'm really excited about some of the things that you guys are doing with that, I wanted to make sure people understand, Allo is a little bit of a unique company that has I think more of a local focus than other companies. The reason that I think it's important is because other cities that might think, "We'll build our own conduit system," you may not get the same results. I hope that they would. I hope that they'll find firms that are interested but Allo has a direct relationship to another Lincoln company, Nelnet, which I'm hoping you can tell us a little bit more about in terms of how Allo's capitalized.
David Young: Nelnet is a Nebraska based student loan provider I believe, and a bank. They have been very successful, very community focused. They were one of the entities we were working with to build community support for the Fiber-to-the-Home program. Nelnet decided they would capitalize the entire project for Allo. They really believe in the community in Lincoln, Nebraska, and broadband as an infrastructure that is designed for 21st century cities. They wanted, Nelnet, their home town to have that infrastructure. It's my understanding they have given Allo $100 million loan to build the entire city.
Chris Mitchell: Right, I think from my perspective as someone who works at the Institute for Local Self-Reliance, we love seeing that kind of local focus, local businesses investing in the community. I think the city of Lincoln has really done a great job in terms of making it easier for that to happen and really facilitating that. In particular because you have this conduit system you have a little bit more leverage in negotiating with Allo for this franchise. If you didn't have the conduit system, do you think you would have had a different discussion with Allo?
David Young: Yes. I have talked to several communities in Nebraska and a few surrounding states about this project and I think your cautionary statement is very correct. Sometimes building a conduit system isn't the right model but I do think that engaging your provider, engaging your community upfront, and deciding what your model should be and then creating a plan and executing that plan is very important. We had the last space in the conduit system, we had a very successful model and we had a ton of community support for our program. When you put those three things together, yes we had a significant asset walking into the negotiations for the Allo project. I think that was born out in the agreement. I wouldn't describe it as leverage. Any partnership, what you bring to the partnership creates value for you and what the other party brings creates their value. We were just trying to maximize value for both parties. With a very successful system already in place we had a lot of value on our side of the table.
Chris Mitchell: Because you brought that value you could then make asks of Allo. One of the things I would start with is this idea of the SSIDs, which is I think we're using that as shorthand for virtual networks and SSID is the name of a wireless network that you see when your device is trying to connect to a WiFi network. Now tell us in terms of Allo's network how these virtual networks are involved.
David Young: Of course you're going to cause me to geek out and your listeners may want to fast forward to this next section.
Chris Mitchell: I think there's other people who might be fast forwarding to this section because we don't geek out enough.
David Young: Really?
Chris Mitchell: You never know.
David Young: One of the sections of the franchise, and this is a public document, anybody can have access to it, is called service to government buildings and facilities. A standard clause in many franchises but there's one section I'd like to read it to you. "The franchisee shall provide 15 Virtual Local Area Networks, VLANs, across the entire system. The public VLAN shall be provided free of charge to the city for non-competitive use. These VLANs shall be available at every connection and termination point on the franchisee's network." To those network engineers out there listening, they will have a big smile on their face because that means I have 15 virtual networks across the entire system that Allo deploys and at every termination and connection point, meaning wireless access points, I can have access to those VLANs. I can turn up my own SSID, Lincoln public school's access, health department access, those are a few of the ones that we're working on right now. A public VLAN access for education is in our library system, combining those two together so they're available on the entire system. It is very exciting. VLANs, if you really want to go to sleep late at night look up and read about VLANs. Basically it's an addressing system for the network and we have 15 of them.
Chris Mitchell: Let's talk about one use case that I'm very excited about. I've been in some ways evangelizing for this type of approach. The intricate technology is not as important to me as the sense of what you can do with it. I like to imagine, I have a child in the public school system, they have a device likely from the public school system. This is hypothetical of course, Jackson is almost one year old. What happens is wherever he goes with that device as long as those VLANs are there, that device could just log in. If he's at a friend's house or even if maybe I'm a low income family, if then he goes out to a public access point or perhaps the neighbor's signal is there and if the neighbor has consented to this, then his device will just connect. Effectively he will be at school on his device.
David Young: With all of the school's network security policies and access to all of the public school's resources, the public library resources. It would be as if seamlessly he was inside school on the same network. Yes, that is one of the most exciting use cases for us as well.
Chris Mitchell: The nice thing is, is that if you're a parent who's really worried about your child being on the open Internet, where they might find material that they're not even seeking and would be inappropriate, the fact that even in your home you wouldn't even have to worry about managing that connection -- Because I think a lot of parents are worried that their kids are going to be more tech savvy than they are, or they're worried that they won't have it set correctly, but now even in your home own your kids is using that device behind the filters and using all those resources. To me that seems like it's a very good solution.
David Young: We were very excited about it. It was one of those conversations, it's like, "What could we do with this? What would be the actual cost of providing this?" It's not a lot because there's some version of over 9,000 VLANs on a particular network so what does providing 15 cost? Not a lot from the provider, other than willingness and creativity of thought. By building this network as a public/private partnership there was a higher level discussion than just a dollar here or a dollar there, it's what could we do together. The Virtual Network, Virtual Local Area Network, VLAN project is actually my personal favorite part of the agreement. As we go forward we're connecting all the traffic signals in the city as they're building it out. We have a new program called Green Light Lincoln, which is upgrading out entire traffic system to the 21st century. We'll be putting in a new ATMS, Advanced Traffic Management System, next year to leverage all these new connections. Over the next three years every street light in the city will be connected to this new ATMS system.
Chris Mitchell: Let me suggest that perhaps your traffic engineers haven't seen Die Hard Four. It's a little bit concerning.
David Young: Technology should be treated cautiously I agree. Die Hard Four was a wonderful movie.
Chris Mitchell: Yeah, especially the part where the car flies up to take the helicopter out, but it's not something I've seen more than ten times, I assure you.
David Young: If you think about commute times and public dollars and impacting people's daily life, if we can make the system more efficient, that impacts everybody's life every day, whether you're riding the bus or whether you're driving your own car.
Chris Mitchell: Right, you can do a prioritization for public transit. As you said if everyone spends less time in congestion you're not only saving them time, you have less pollution. There's tremendous benefits to this.
David Young: On that, and then the other piece what if we don't have to widen the road? To widen the road costs us -- A road widening project for one mile is $10 million. What if we can just upgrade the infrastructure and allow more cars to travel through faster? We don't have to spend that public dollar there, we can spend it on maintaining that road instead of widening it and impacting those properties that are adjacent to it. It is really exciting for us. It's an exciting time to be in Lincoln working with the Public Works Department. Fiber-to-the-Home, the Fiber-to-the-Business project, the Green Light Lincoln project, there's a lot of technology projects going on right now in Lincoln.
Chris Mitchell: We talked about a couple of different aspects with the franchise. Is there anything else that you see that you are doing in Lincoln working with Allo that others aren't doing where you're getting ahead of the curve?
David Young: Defining the characteristics of service is something we do in our franchise. Basically, in most franchise you provide service to the city, great but we go a little further and we say that all residents and subscribers shall be provided service under non-discriminatory rates, terms and conditions. Meaning everybody gets the same price, no more negotiating for price. We also say that there are no residential contracts for service allowed, so if you don't like the price you're receiving you're not locked into a contract. We also do not allow installation fees, except for in very unusual circumstances. You can't get charged to have it installed, there is no contract and you're paying the same rate as your neighbor. We think these are actually very good things to put in a franchise because it creates a very competitive marketplace for the carrier, they have to compete on customer service and quality of service, not on contracts and the fact that you negotiate better than your neighbor about price. I think that's important. I think that other communities should consider doing that. I'm staff for the telecom advisory board for the city and a lot of the complaints we get are, "My service isn't great from X carrier," and, "I pay too much," but there is no competition. That was the single most, the highest complaint that we received. The highest number of complaints that we received was “there's no competition.” When you're building out a new infrastructure you're going built to every home ensuring that those competitive roadblocks are not institutionalized in your franchise agreement. It was very important to us, and I think other cities could look at that.
Chris Mitchell: I want to talk briefly about Rights of Way management, which is a part of your title. I'll telegraph that you're going to be back for a show later this year, in I don't know maybe another 10 episodes, in which we are going to be talking about some small cell deployment type stuff that your approach is enabling you to do. One of the things I feel like you've done in Lincoln is that you have simplified permitting in ways that both Allo and Bluestem may find it easier to pull permits and to build than they would in my city, in St. Paul, Minnesota perhaps. Do you have any advice for communities in terms of dealing with Rights of Way?
David Young: One of the major initiatives we had in 2013 was how to make our system more business friendly. Permitting was the number one area of conversation with every carrier we talked to. We did a little reorganization project and a study inside of public works and identified every staff position that was associated with managing the Right of Way, inspections, plan review, private development, public development, and we put them into one team called the Right of Way Construction team. That team is responsible for all public facing Right of Way construction projects, meaning if it's a natural gas project, if it's the waterline project, if it's a sewer line project, if it is not a CIP project, so not a capital project, then this group manages that and works with the public to ensure a fast, safe, and affordable project. As part of that program, as part of that program, we created an electronic permit system where carriers or franchisees can upload their plan set in a very simple permit. Our goal is to have that approved in two business days or less. Sometimes we get a little bit longer than that but most of the time we get it approved in about two business days.
Chris Mitchell: One of the things you had told me before was that when it comes to dealing with these companies, many of which I think local governments are frustrated with because they don't feel like they can get enough out of those companies in return for use of the Right of Way, I think you've said those companies are much more willing to negotiate on terms that would be viewed as favorable to the community if the community can turn permits around quickly. That's the thing they really care about.
David Young: The old adage, time is money, is very important. From the time a sales person goes into a business and says, "I would like to provide you with next generation broadband," to the time the company can actually deliver that broadband, is a very sensitive topic. The faster they can do it, the better they look to their customers, and, when they go slow, they point the finger at the city and say, "We can't get through permits, blah blah blah." If you can align your interest with the company, which is the city wants that customer turn up on broadband, we want them to be a happy customer, they're our customer too. Streamlining the permit process, it takes a little insight into why you're a community, why you're a service provider in the community and what your values are as an organization. For Public Works, it was providing good customer service that means providing good customer service to our corporate clients as well, and permits is how we do that. Establishing a goal, making that goal known, putting a goal in the contract, that gives the carrier comfort, allows them to forecast a little bit better. It gives them a better level of customer service, a better sense of partnership in the agreement instead of a one-sided agreement. It has paid off with us, all of our contracts have 15 minimum day turn times permits and we try to do it in two.
Chris Mitchell: Great. I want to ask if there's any last words of wisdom you might have from your entire lifetime working on this conduit project?
David Young: You know this is the second conduit project I've worked on, getting out there and talking to the community is critical.
Chris Mitchell: Let me ask you about that for a second, because I just imagine me going out and trying to talk to people in the community about conduit. I imagine people rolling their eyes and being like, "I'm bored," or, "I'm not interested." What does that mean?
David Young: I don't talk about conduit.
Chris Mitchell: Okay.
David Young: I talk about the Internet. We open with a couple of jokes and everybody laughs and we have a good time. Then we talk about the Internet and why it's important in their lives. The access to a trillion dollar marketplace, the competitiveness with other cities to attract and retain young people, young workers. We talk about the highest paid IT jobs, network engineers, database administrators, and architects, server engineers. You don't get those jobs unless you have a good robust broadband infrastructure. People get excited about that. A lot of people still don't understand truly what the Internet is, there's a feeling in some circles that it's a nebulous thing. Why is it important to me? My presentations generally are 10 slides and 15 jokes, and then we talk about what's really important to them, how their business can leverage the Internet to make more money, be more customer-focused. I'm done in about 30 minutes and then we talk, answer questions for 30 minutes. It's a great time, people feel like you're actually talking to them about what's important to them. We don't really talk about conduit. Usually I bring a piece of conduit, a piece of fiber and pass it around the room and let everybody touch it and feel it so they get an idea. When I first started here in 2012 almost every group that I went to that I took this piece of conduit and fiber to loved it. People wanted to see it, they had never seen and heard about fiber their whole life. They'd never seen it, they'd never touched it. Giving them that tactile sensation of handing around a piece of hard conduit in your hand and somebody says, "What happens if somebody digs into it?" You bang the conduit on the table, "It's pretty tough stuff." They laugh, and it's a good time. You have these visions, and I've been to these meetings where it's long and painful and slow. It doesn't have to be that way, but it takes a lot of work building a presentation that's fun and exciting and really talks to what people care about, not what you care about. I care about conduit but most people really don't care about that, they just care about the Internet, how it impacts their life. Talking about that is the best advice I can give people because people get excited about that and then you get to ask for support, asking for help in the community to prioritize budget money for that project. It's a finite pool. People want to support projects that they like so you have to get out there and market your project to the community so that the mayor and city councilors hear from those groups, to say, "Yes, we want this. Yes, we want to support this. This is a good thing."
Chris Mitchell: I think that's a great note to end the show on. Thank you so much for coming on.
David Young: Chris thank you very much.
Lisa Gonzalez: That was Chris talking with David Young, Lincoln, Nebraska's fiber infrastructure and Right of Way manager. As the network unfolds we will bring you more news. Remember we have transcripts for this and other Community Broadband Bits podcast available at MuniNetworks.org/broadbandbits. Email us at firstname.lastname@example.org with your ideas for the show. Follow Chris on Twitter, his handle is @CommunityNets. Follow MuniNetworks.org stories on Twitter where the handle is @MuniNetworks. Subscribe to this podcast and all of the podcasts in the ILSR podcast family on iTunes, Stitcher or however else you get your podcasts. Never miss out on our original research by also subscribing to our monthly newsletter at ILSR.org. We want to thank the group mojo monkeys for their song, Bodacious, licensed through creative commons and we want to thank you for listening to episode 228 of the Community Broadband Bits podcast.