Transcript: Community Broadband Bits Episode 245

This is the transcript for episode 245 of the Community Broadband Bits Podcast. Brough Turner of Netblazr joins the show to explain point-to-point wireless service. Listen to this episode here.

 

Brough Turner: Here's the deal. It's $59.95 a month. No contracts. No teaser rates. No special deals. But we're not pulling any funnies on anybody and you can leave at any point.

Lisa Gonzalez: This is Episode 245 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. NetBlazr is a Boston wireless Internet service provider that focuses on urban delivery of high-quality Internet access. This week, Brough Turner, founder and chief technology officer, connects with Christopher to talk about the ins and outs of providing the point-to-point wireless service in an urban area. Brough gets into the technology and the guys discuss what might be in the future of wireless. Brough also shares his company's experience as a startup, some of the challenges they faced, and how NetBlazr is keeping up with demand. Check out their website, NETBLAZR.com, to learn more about the company, the technology, and the team. Here's Christopher talking with chief technology officer and founder of NetBlazr, Brough Turner.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today I'm speaking with Brough Turner, the founder and chief technology officer for NetBlazr. Welcome to the show.

Brough Turner: Thank you.

Christopher Mitchell: We'll get into this in a second, but NetBlazr's a wireless firm. We're going to talk a lot about wireless technologies. Maybe you can just tell us a little bit about what you know about wireless networks. I guess a different way of saying that would be, tell the audience why they should listen to you.

Brough Turner: Let's see. I'm an electrical engineer in distant origin and I've started a few other companies. I spent a lot of years working in computer telephony and early voice over IP. In 2008 I was perceived as a wireless expert and I had tons of theoretical knowledge, but at that point I would say I had zero practical hands-on experience. I was out of a job. My previous company, we'd sold it off in pieces. I was pondering what to do next. I have been generally pissed about US broadband policy for 20 years now. I decided I would do something about it in the way I understand, which is as an engineer and an entrepreneur. I came up with the idea for NetBlazr. I conned my partner, Jim Hanley, into joining me in doing this. We started up in 2010. Quite frankly, it's okay to have tons of theoretical knowledge, but the hands-on also is worth something. The business model took us probably till late in 2012 to crack the code on what we were really doing. Since then, it's been very rapid growth. I have a lot of experience. It's, as an urban wireless Internet service provider, NetBlazr is in downtown Boston, Cambridge, Somerville. We don't go out to the suburbs. I don't have any experience with rural stuff except talking to other members of WISPA [Wireless Internet Service Providers Association]. Tons of theoretical knowledge. Six years, seven years of practical hands-on experience in an urban environment.

Christopher Mitchell: Let's just be clear. You're a WISP, and yet you're somewhat of a rare WISP, in that I think those of us that have dealt with a lot of WSPs are used to a kind of condescending attitude from some. I've certainly met wonderful people that are running WSPs, but I've met many people who also tell me, "Oh, three megabits is just fine. When it's a good quality three megabits, you won't ever need anything else." You've taken a different philosophy, which is that you want to deliver high throughput. How's that working out?

Brough Turner: Very well. We have a lot of customers on a 300 meg down, 300 meg up service. We're migrating new buildings to 500 down, 500 up. I'd like to do one gig down, one gig up, but to do it to the standards that we're used to still has some price increment, which I can describe at some point. Right now we're focused on 300/300 or 500/500. We sell that for $59.95 a month. No contracts. No whatever. We earn your business month by month. That's very profitable. It's relatively easy to do for multi-tenant buildings. I think the smallest building has 30 units in it. We have a lot of buildings that have more than 100 either condos or apartments. That's our bread and butter high speed stuff. For isolated buildings that we can't really justify the investment that we would put into a building with 50 or 100 doors, we have another piece of technology, which is somewhat related to rural WSPs. We manage to get either 15 megabits down, 15 megs up or 50 megabits down, 50 megabits up as the two service levels for isolated buildings. Three megs sounds crazy to me. I wish I could offer a gigabit symmetric. It's much, much cheaper for us to offer 500 megs down, 500 megs up with the technology we can get off the shelf today. That will change.

Christopher Mitchell: Are you wireless all the way to the user? How does it work if I'm a person in one of these buildings getting your service? How does the signal travel?

Brough Turner: We are wireless. Typically high-speed point-to-point links. We have a rooftop-to-rooftop. We have at the moment seven different fiber feed points in the downtown Boston, Cambridge, Somerville area. From these feed points, we go out to hundreds of buildings where we have -- Typically on the roof of one of these buildings we'll have three to six radios. It's powered over ethernet in the mechanical space or the upper top floor, telco closet, or wherever we can locate a rack. We put a UPS, a router, a power over ethernet switch. We use this dense mesh of point-to-point links to distribute capacity to hundreds of buildings. The point here is that we always have at least two paths to any important building and we have routers at every node so we can rearrange our network automatically. Should a building lose power, typically the relay function will keep going. The only customers who are out are the ones who are in that building.

Christopher Mitchell: You end up with a really high-capacity, high-quality signal on the roof. How does that get to people then within the units? That goes over the structured wiring in the building already?

Brough Turner: Yes. Basically, we run cables vertically. Most multi-tenant buildings have, not all of them, but most of them built in the last four or five decades, have stacked telco closets. Our only hard part is figuring a path to get from the roof to the top telco closet. That requires some ingenious things, and every building is different. We don't want to penetrate the roof, because we don't want to be on the hook. We're looking for ways to go in through the wall of the head house or the stairwell or some existing penetration. But once we find a path, that is the one piece of ingenuity, is how do you get from the roof to the top of the stacked telco closets. We run our own cables vertically. Typically Cat6 cable. We locate the routers at the top and we put switches where we need to in order to cover the number of people we expect to penetrate in the building. Some buildings will do a bulk deal, in which case we're lighting every apartment. That's not the most common, but we have a number of those. Other buildings we figure it partly depends on the demographic, but we're figuring on a 30 percent penetration within a year or so. Our best building has 52 percent penetration, and that's us competing against Comcast and Verizon. Our worst building is whatever is our newest building, because you get a burst initially and you get a few more rounds in 60 or 90 days. Then you wait out the year as people's contracts expire and they're ready to roll over and try something new.

Christopher Mitchell: Some of our listeners might be listening to this and thinking, "Well, this is very similar to what WebPass is doing." But I think you have a twist on it that they're not doing. For people who may not have been paying attention, WebPass was the firm that had a business model that's somewhat similar that Google bought and is now we expect going to be ramping up.

Brough Turner: Yes. Certainly some similarities to WebPass. In fact, WebPass announced they were coming to Boston and we were initially worried. Since they've been acquired by Google, my impression is that they are signing buildings but not actually bringing buildings online. They are in Boston. I don't know the extent to which they have the technical model we have. They're mostly using Siklu radios. We're using some Siklu but mostly Ubiquiti airFibers. They're certainly going after buildings with more than 50 doors. They do their wiring inside the building in much the same way we do. Beyond the two of us, there are three or four other companies I'm aware of who do similar things in different cities. It's not the thousands and thousands of WSPs you see in rural areas, but there probably are four, five, or six companies like NetBlazr doing things in urban areas. I would say it's early days but it's an incredible growth opportunity for us and for anyone else that wants to get into it.

Christopher Mitchell: Brough, how do you engineer the network to make sure that you're always delivering the speeds that you're promising, even if there's bad weather or something like that?

Brough Turner: We don't have anything that slows down during inclement weather. There are three exceptions, but all of our links are engineered for at least five nines in terms of the weather. There are three links that are airFiber links that are approaching three kilometers. Those have a number of minutes of outage per year. But during that time I've got five gigahertz back up. There are certainly portions at the edge of the network where the backup path is a five gigahertz link without adequate capacity to guarantee full speeds. For example, we're in Medford now. Medford is a suburb. We're hopping from Cambridge and Somerville to the edge of Somerville to the edge of Medford. The primary links are all airFiber, so I've got more than a gig of capacity coming out in that direction. The backup is probably limited to 100 megabits by the time it gets out there. There's certainly the case that, should we experience some sort of an outage or a failure somewhere, people will still have service, but it may not speed test the whole way during the period of us scrambling to repair things. Literally out of hundreds and hundreds of wireless links there are three of them that I worry about the weather.

Christopher Mitchell: You certainly had plenty of opportunities to test that in recent months, let alone years. One of the questions I wonder about is, is there a constraint to expanding this service to all of the larger residential buildings in Boston and actually the metro area? Is there a constraint in spectrum or in terms of other issues, like line of sight, that would make it difficult? Is this something that you literally could, with the right time and if the cards fall right, you could take this to every last large building in the area?

Brough Turner: Technically we could take it to every last large building in the area. There's not a spectrum limitation. At five gigahertz there's obviously spectrum issues. We basically have a lot of 24 gigahertz operation and we have a few links at 60 gigahertz and we're putting in our first 70 and 80 gigahertz link. There will be a couple more of those. Anything in the 24, 60, or 70, or 80 gigahertz range is a highly directional beam. Basically you have no interference. You just reuse the spectrum over and over again. From one given roof, you can send out beams that are less than 10 degrees apart on one frequency, and you've got 24, 60, 70, and 80. There's not a spectrum issue for doing high-frequency, high-capacity, point-to-point links. In terms of line of sight, dense urban areas have a lot of buildings and you can't always get to a particular building right away. But if you were talking about filling things in, we can get to an awful lot of things. It's only occasionally we have a real problem with how do we get there. There's a little, low building in Chinatown, a four-story building in Chinatown, surrounded by 20-story buildings. The problem is how do you get a mount at the edge of one of the 20-story buildings that's close enough to the edge that you can look over and get a line of sight down to the four-story building in Chinatown? No. I would say there is certainly a capital issue. We look at our capital investment on trying to break even within 12 months. Sometimes it's better and sometimes it's worse. Let's see. We started doing all our capital investments entirely from cashflow, which meant we were growing fairly slowly. We raised $1 million in convertible loans. We used that to grow a lot more rapidly. We've reached the point where we're EBITDA-positive. We're approaching the point where we may actually be gushing enough cash to fund the current growth rate. But that's still a few months in the future. There's a capital issue. Then, beyond that, quite frankly, we're not growing faster than a mere, say, eight percent per month because we're still scrambling to put in place the automation and the training and the policies and procedures that can keep us ahead of where we are. We are constantly scrambling. We're growing. If we were a more professional organization or where I hope we'll be one year from now, then there's no reason we can't grow even faster and there's no reason we can't go to other cities.

Christopher Mitchell: You're not seeing any anti-competitive kinds of behavior. It seems like when you look at ISPs that are trying to really get big quickly and they're putting their name on the map, you might have Comcast coming in and really trying to underprice them and that sort of thing. But a comment you made earlier made it seem like for you're growth you're not having to work that hard for it. You're mostly focused on internal issues and getting them set up right.

Brough Turner: Yeah. We're still a drop in the bucket for Comcast in the city of Boston. One of the things, as I remember, is when the cable companies came after the phone company 15, 20 years ago with their triple play and they started offering voice telephone service. Verizon did not react to Comcast taking over voice telephone business, which was their bread and butter, until Comcast had taken 20 percent of the market. I don't know if Comcast will react more completely, but we're nowhere near taking five percent of the market, let alone 10 percent or 20 percent. I don't expect Comcast to be noticing us except for individual people in specific buildings maybe. There is a building where we now have past 50 percent and it's a building that Comcast has served poorly. Maybe somebody will notice that. But, no. I don't see that. I do see building management is all over the ballpark. Some people love what we're doing and want to offer their tenants new things. If you run into a condo, what we do, we just wait until we have a couple of people inside the building who'd like our service and we get them to introduce us to the condo board. If somebody's on the condo board, it's a no-brainer. On the other hand, I can think of one large condo in downtown Boston. It's multi-hundred-unit building facing the Common. They literally get a six percent kickback from Comcast. This is the condo management operation gets a six percent kickback. This allows the condo board to cut a different deal with the condo management firm. There was many hundred people in the building and we didn't have an advocate on the condo board. The condo board basically said, "Well, unless you give us the six percent kickback that Comcast gives us, we won't let you come into the building." We said, "Well, we don't deal with kickbacks and we don't do anything. It's simple. Here's the deal." We are not in that building.

Christopher Mitchell: To give a sense, I would guess that a building of 50 people, a six percent kickback on revenue, you would expect that would be in the order of $5,000 per year, maybe give or take, but that's the order.

Brough Turner: Here's the deal. It's $59.95 a month. No contracts. No teaser rates. No special deals. But it also doesn't go up. Over time, we look to provide more and more services for that amount of money. But we're not pulling any funnies on anybody and you can leave at any point. But by the same token, we don't want to get into weird funnies and kickback schemes and agents and so on and so forth.

Christopher Mitchell: I salute you for that. I think probably most of our listeners do. Frankly, just about everyone who's had to deal with the cable companies salutes that. I'd like to round out the discussion with a little bit of where we're going with wireless technologies and that sort of thing. I think it might be useful to talk a little bit about the cost of these wireless radios, because some people look at these kinds of services that are being provided to the multi-tenant buildings and they think, "Well, we just need to do that on single-family homes as well." I'm guessing that it actually doesn't work out that way. You can't really scale it. Because whenever I talk to WSPs that have a single-family home approach, it's generally on the order of 25 or 50 megabits at the upper end it seems like nowadays. I'm just curious if you can give us a sense of how this works and what we might expect for rounding out single-family home coverage from WSPs in the future.

Brough Turner: We do provide single-family home coverage, but you're right. The choice is either 15/15 or 50/50.

Christopher Mitchell: One of the things I'm curious about is whether or not that technology will improve rapidly enough that you would ever be competitive with cable for those who care about the higher-quality speeds. Which is to say that will the wireless speeds improve more rapidly than the cable speeds have been?

Brough Turner: Maybe. There are a number of interesting things in so-called 5G. Forget about the 5G that's part of the mobile operators and thinking of the underlying radio technology. There are things with massive MIMO, the potential to deal with non-line-of-sight reflections and things like that mean that potentially you could be using 24 or 60, one of the higher-frequency things, to get to single-family homes in some shared fashion. That's not in the next three to five years, despite what people may claim. But it is in the next 10 years. For sure there will be some pretty dramatic stuff at some point. Meanwhile, we've got Ubiquiti and Mimosa Networks and the Motorola spin-out Cambium, competing to bring new radios to up the speeds that you can deliver to individual users. Independent of any major technology shift, there's ongoing improvements. Things get better every couple of years. Will it get faster than cable? I think over 10 years, absolutely. Cable has a lot of investment it needs to do to get from coax with amplifiers to coax with no amplifiers to fiber to the home. When it gets to fiber to the home, it'll be ahead of us. But the next investment they have to get to right now is fiber to the node and then cable with no amplifiers before they can do much of anything. They have a major capital investment also.

Christopher Mitchell: Then, I think you were going to continue a thought and I pressed in on some of this, the economics of the home. Do you remember what that was?

Brough Turner: I was going to talk about the economics of the multi-family buildings, which in urban areas are a major percentage of what's happening. There we are talking about the list price for a Ubiquiti airFiber 24 link is basically $3,000. I buy a lot of them, so I'm paying, I don't know, less than $2,800. But I'm still paying thousands of dollars per link. The list price for the 60 gigahertz radios, which we've trialed in a few places and still had some problems with, but which I'm very, very, very interested in, that's the IgniteNet MetroLinq radios. When I'm confident that they're really rock solid, that's basically one gigabit TDD, which is from my perspective 750 down and 250 up, is quite a respectable thing. That's about $1,000 per link, although the range is shorter than the airFiber 24. But again, we have an awful lot of links that are pretty short. A few city blocks. Then, at the 70 and 80 gigahertz range, they're basically Siklu and BridgeWave are providing two gigabit, four gigabit, up to 10 gigabit links that are good for two kilometers easily. 2,500 meters perhaps. Again, I only have three links that are more than two kilometers in the entire thing, and I have hundreds of links. You're paying thousands of dollars, but those prices are coming down. For the 60 gigahertz radio, once we have that stuff deployed, for less than 1,500 meters it's $1,000 for a high-capacity link. Those in the audience who run ISPs are aware of how things work, but an awful lot of people aren't. Some people who, and even rural WSPs don't think about it the way we do, say you've got 100 customers and you're feeding them with 700 megs or a gigabit or two gigabit capacity. The question is, what do you need to do to guarantee that they all see 300 megs up and 300 megs down any time they run a speed test? The answer is, if it's 300, you need 300 megs of headroom above the peak of the actual usage. If it's 500 meg service, you need 500 megabits of headroom above the peak of the actual usage. For residential users in Boston, that peak is distributed at different times between nine PM and midnight. I look at minute-by-minute averages of the actual traffic between nine PM and midnight. As long as I've got 300 or 500 megs of headroom above that actual traffic, then anybody who runs a speed test or anybody who hits a webpage and does a download or something will get the full 300 or 500 that they're paying for. What's the average for 100 users in Boston on a 300/300 service? The answer is 1.2 megabits per second per user. The reason for that is that some of the people went out to dinner and some of them are watching Netflix not in HD and the few are watching Netflix in HD, which is only like four megabits anyway. The reason for the high speeds is not because you're going to use that capacity all the time. The reason for the high speeds, the reason there's a real benefit and would be to a gigabit service, is for reducing latency. When you click on something, pop. It's right there. Because you go really fast for a very short amount of time, and then you don't do anything for a long time. If you have 100 or more people, that averages out to 1.2 megabits per user during the evening peak.

Christopher Mitchell: In my mind, this whole discussion about what a person uses over the course of a month, or this or that, it doesn't tell you whether or not they're achieving what they want to have done. If I'm a small business or even myself, whether I'm acting in a small business capacity or not, and I'm trying to e-mail, or not so much e-mail, but upload a large file to someone, I don't want to sit there for a half hour and watch it happen. I just want it to be done. Even if I only do that a few times a month, that's important to me. I don't think you want to size your link based on how often I do something, necessarily.

Brough Turner: The goal is to provide as much available speed as you possibly can, because that reduces latency. What people actually use averaged over periods of time is a lot less, and that's fine. That allows me to aggregate a lot of people and provide them with blazingly fast service using radios I can actually buy.

Christopher Mitchell: I think one of the points you've made a number of times elsewhere also is that you can do this affordably. It's not bankrupting you to offer high-capacity connections.

Brough Turner: No. No no no. No. I do have an advantage. We're in an urban area, which means there's a lot of people. A lot of prospective customers. Basically, we won't do a building unless we can put a minimum of three radios on the roof. If the building says, "Oh, we won't allow you to use our roof to relay to anywhere else," we won't do it, because our whole model is a dense mesh of point-to-point links. That's generally not a problem for 98 percent of people, but it comes up every now and again.

Christopher Mitchell: I want to ask you a hypothetical question, because I know that Boston has fiber that could be available, but they're working internally on the policies and that sort of thing I think. My question is more for a generic city, particularly a larger urban city. Would having fiber available that you could lease, or conduit, make it easier for you to expand your business and services? If so, what do you need? Not just the hypothetical knowledge that fiber is there, but what do you need the city to do to make it valuable and useful to you?

Brough Turner: I'd rather deal with private companies because it's faster and easier.

Christopher Mitchell: No. I appreciate that. You know me. You know my position on a lot of these things. But let me just share with you an experience that Travis Carter with US Internet relayed previously with us and led us to go do an interview with St. Louis Park. They gave him basically, I think it was a sheet or three sheets of paper and said, "Here are our terms. Let us know what routes you want to use and then it's yours." It strikes me that if cities can make that work then maybe that would turn your opinion a little bit.

Brough Turner: Boston. Verizon has fiber to all sorts of places. Comcast has fiber to all sorts of places. But if you look at Level 3, Lightower, there are about five or six companies that have fiber to various buildings in the city, but they only have fiber to maybe 150 or 300 buildings. But that's enough. I don't need fiber everywhere. I need fiber to a few places around the city as seed points. 10 years ago the only possible model that would have made sense would have been to back haul everything to a data center where I could buy Internet transit from two or three different upstreams. But in fact data centers are rather expensive, from my perspective. I can actually today buy burstable Internet transit at specific buildings not in a data center. I literally have four U of rack space that I rent as a sublet from somebody in one data center. Basically we don't have any data centers. We have seven fiber feed points where we're buying Internet transit from one of three existing vendors. If the city was doing something, if it were very appealing, I'd certainly think about it. But would it be fiber that would -- In the end, it would have to go back to some Internet data center, and there I'd have to rent some space, pay for some power, pay cross connect fees, terminate the fiber, be an interesting monthly recurring, even if the city was giving me the fiber for free. Every deal is different. In any of say the top 30 or top 50 markets, there are multiple providers who own fiber to some buildings. If you can cut a deal with one of those guys, it's probably easier than renting a layer two fiber or owning a layer two connection to a data center and doing it all yourself. I don't know if the economics are great or not. It would totally depend on the price.

Christopher Mitchell: I think it's helpful to get that real-world perspective. I think I will limit myself to one last question. We've already gone longer than most of our shows, but I'm really enjoying all of the information that I haven't necessarily seen anywhere else. What do you think about in terms of city policies that would try to deal with the contracts that Comcast already has and others, in the sense of San Francisco has passed a bill or it's passed a statute that gives tenants basically a right to choose different ISPs. Landlords would not be able to charge unreasonable fees for you to get into their buildings. That is of course not perfect, because you have to deal with that term "unreasonable." But is that something you would see benefiting urban areas from your perspective?

Brough Turner: Possibly. As I say, there's a enough buildings that are interested in our service that we can walk away from anybody who wants to charge us any fee, reasonable or unreasonable.

Christopher Mitchell: That's the way the market is supposed to work, of course.

Brough Turner: Yeah. There are enough buildings that we have not been tempted to pay kickbacks or to pay access fees. We have a capital investment. We have to pull things, and so forth. We will give the building manager or the building whatever one free service, but in exchange we expect to be able to consume 150 watts of power. We're expecting the building owner to basically, for the privilege of having us as a amenity for their tenants or their co-op members, they need to let us get in and invest our capital. They need to pay for the electricity that we're going to use, which in many cases is 150 or 180 watts. In exchange, we give them a free high-speed Internet connection in their office.

Christopher Mitchell: I want to thank you for taking all this time to talk with us and to share your experiences, to be so open, frankly, with your costs and whatnot. I think people are going to get a lot out of it, so thank you.

Brough Turner: Okay. Any time. Happy to help.

Lisa Gonzalez: That was Brough Turner, the chief technology officer and founder of NetBlazr, talking with Christopher about the company and what it's like to offer high-speed wireless services in an urban environment.

Christopher Mitchell: Hey, everyone. I just wanted to thank you for listening and helping out to create a stronger Internet ecosystem, making sure everyone has high-quality access. Please tell your friends. Tell others who might be interested about this show. If you have a chance to rate us on iTunes, please do. Several people already have. We really appreciate all of the comments. We really appreciate you taking the time to listen to us.

Lisa Gonzalez: We have transcripts for this and other Community Broadband Bits Podcasts available at MuniNetworks.org/BroadbandBits. E-mail us at podcast@muninetworks.org with your ideas for the show. Follow Chris on Twitter. His handle is @CommunityNets. Follow MuniNetworks.org stories on Twitter. The handle is @MuniNetworks. You can subscribe to this podcast and all of the podcasts in the ILSR family on iTunes, Stitcher, or wherever else you get your podcasts. Never miss out on our original research. Subscribe to our monthly newsletter at ILSR.org. We want to thank Break the Bands for the song "Escape" licensed through Creative Commons. We want to thank you for listening to Episode 245 of the Community Broadband Bits Podcast.