Transcript: Community Broadband Bits Episode 292

This is the transcript for episode 292 of the Community Broadband Bits podcast. Ernie Staten of FairlawnGig in Fairlawn, Ohio, joins the show to discuss what the city's learned from running its own municipal fiber network. Listen to this episode here.

 

Ernie Staten: We've heard from many of these younger families coming into our town, saying this is the reason why we're moving here is FairLawnGig.

Lisa Gonzalez: This is episode 292 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. When we last checked in with Ernie Staten from Fairlawn, Ohio, it was May 2016 and the community near Akron was getting started in building out their fiber optic network. The town has been deploying networks since then and is offering services to both businesses and residents. In this interview you'll hear Christopher and Ernie talk about Fairlawn's approach and how they're driven to provide the best infrastructure for the community. You'll also hear how the network has been received so far and the many ways it's paying off. Ernie shares some of the challenges they've encountered and how they've used outreach to overcome them. Now, here's Christopher with Ernie Staten from Fairlawn, Ohio.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell up in Minneapolis, the Bold North, Institute for Local Self-Reliance office where we just hosted the Super Bowl and we had a crazy new slogan as a part of that, but today I'm torquing about Fairlawn, Ohio, with Ernie Staten the deputy director of public service in Fairlawn. Welcome back to the show, Ernie.

Ernie Staten: Thanks for having me, Chris.

Christopher Mitchell: Ernie, you are one of the more interesting projects I think that we've talked with in the past because you have built a citywide municipal fiber network without the electric utility. How have things been going for you?

Ernie Staten: You know now that we have it off the ground to customers we're putting customers on as quickly as we possibly can. And I would say overall this has been a big success. We're pushing that 50 percent mark here in this city. Customers that are actually on our network and we're installing more and more every day with everyone doing a lot more streaming now and that type of bandwidth that we can put out. It's really starting to grab hold. So I think this was a huge success and a good project for the city.

Christopher Mitchell: Now if I remember correctly you're a modestly sized city part of the Akron Metro that has quite a lot of people that commute in for work.

Ernie Staten: That's correct. Our population is 7,400 during the evening and during the day and working hours we swell to 30-40,000 people. We have quite a bit of office space here in the city. And we have is a good balance of office and retail that's here in the city. So during the day 30-40,000 people this is about the average.

Christopher Mitchell: And so you are seeing a good uptake from both residents and businesses. I mean how long has it been since you've finished the service? And then let me just ask you about how it's been going a little more in detail.

Ernie Staten: We finished the actual fiber build about two months ago and we put customers on as we build. So that's probably a little different than most applications. We felt it was necessary as we went by a house that we grab that customer we show the effort since this is a municipal network and there's tax money that go into it from from our general fund. It made sense for us to connect people as we went by. Right now we're pushing the 2000 customer Mark. We have about 2500 residents and about 500 businesses that are on our service. And really at the end of the day the businesses came along just a little slower. And I think the reason why they came along a little slower was contracts that they were and making sure that our service was as reliable as we had touted. And then just getting a feel from the residential piece whether they had whether we had given the type of service that we claimed. So now fast forward we're starting to get businesses more and more and more and then residential is starting to drop off because we we connected with the residential customers a week every week from the moment that we started the project. So really the project started in January of 17 and we ran the entire year of building the network and putting customers on at the same time and get to the end of the year we're into the new year and 18 were certain to slow down on the residential. But again the businesses seem to be picking up right.

Christopher Mitchell: That's something that's very common because of those contracts. I think a lot of small businesses that includes nonprofits like mine. We tend to get into two 3 year contracts and so those will be up. And then when they're up you know we'll switch over. So it's something we see in a lot of places. One of the things that you said that I wanted to make sure people heard was that you did put money from the general fund this you're treating this much like infrastructure as a city. You're not trying to replicate the cable model. And if I remember correctly from our previous call you would very much like for the network to pay for itself but your number one focus is creating community benefits the stronger economy more keeping more money in people's pockets. That's your number one focus right.

Ernie Staten: That's correct. So your memory is great. But the idea here was that we were going to build a utility and we were going to treat it just as we do any of the infrastructure that the city has. So if you live in the city of Fairlawn you're fortunate enough to have new roads built without assessment water lines built without assessment's sewers built without assessment or any additional tax for any of those items. So the whole idea was that we would build this network the same way we would not raise taxes. We would not assess for the work that's done in front of the homes and we witnesses to go to the homes. So residential wise we go all the way from the data center here at the service department all the way to the home place. Oh Auntie inside the home. All of that work is 100 percent free and we paid for that out of general fund the services that we have. Those services pay for basically our operation and any upgrades. So operation not meaning the debt the operation is only what it takes to run front line gigs so it's our upstream providers. It's electricity for the the data center. It's the consultants that we use to help us run the data center and the services it pays for the actual installers to do the work of installing in the home. That's the operation side and then upgrades obviously everyone knows that these networks are constantly you constantly need to upgrade and watch over them so that that is paid for by services. That said we hope someday that we do well enough with services to start paying some towards a debt. But that was never our intent from the very beginning. And really the main idea that we try to focus on and try to explain to all of our people is we were hoping for the sauf costs so that's what we call the soft costs. We're hoping that we we generate more taxes. People spend more money at the restaurants more money at our mall more businesses come in to Fairlawn and the businesses that are already here we hope that they stay and grow within the city and having this type of infrastructure allows a lot of businesses to grow and just become more viable for the area. So at the end of the day that was our concern was making sure that those soft costs that our taxes keep going up. There's there's all sorts of bonuses coming out of this network that the latest bonus is the mayor's state of the city. I did a report for him from the real estate group in this area is called nor DACs and basically they just give you an overall of how your real estate is doing it within the city or the state or whatever location you're at here in Ohio it's called nor DACs nor DACs gave me information that from 2016 to the end of 2017. The housing market has gone up eight point five percent. Inside the city of Fairlawn now the economy is doing well. That I believe it does say that their gig had something to do with getting the home values here in the city much higher. Eight and a half percent. And a little more than a year is a huge jump.

Christopher Mitchell: This is another way to show that that's what these networks are doing when you've gone a little above and beyond the traditional approach by having an ambitious wireless component to your network using Wi-Fi. Can you tell us a little bit about that I know that it's not complete yet but you certainly have a sense of where you're going and what's available already.

Ernie Staten: The idea behind the wireless network that we were going to put in for the entire city. We could call it a net. We're going to try to net the entire city with a wireless component. Our thought was we have so many visitors that come into town there has to be a way to capture what the visitors do and help visitors out so that they didn't have to use a big data plan with their phones or tablets whatever they would bring in the town they could use the wireless network and we would have really three levels of network so we would have one that is just a guest network just like you would get from a Starbucks or a McDonald's or maybe even a hotel. Then we would have a second level that would be a paid level and it would be a 100 percent secure and it would look a lot like getting it from an airplane but we would sell a monthly plan on that so you could come into Fairlawn and get a monthly plan. And what we are looking at doing was ten dollars a month and you could get a 30 by 30; 30 Mbps by 30 Mbps package for the month on your wireless device. Then the third piece of the wireless was if you're already a good customer you live in Fairlawn or you have a business and for one you would then have a right to use the network at no cost to you and you would have a password and it would be secure just as it is for the network inside your home. So there would be three components to that network. Right now we have placed access points on all of our city infrastructure whether that is buildings traffic signals tornado warning sirens and a few other polls that we have here in the city and we're currently working through negotiation with our local electric provider to put some of these excess points on the electric poles. Then we'll have a basic infrastructure for the entire city along with this. We're probably going to put in a few monopoles and hopefully that will help with the cell carriers also. But we're going to put monopoles into areas where all the infrastructure is underground and we don't have utility poles to put access points on. So we hope at the end of the day we're looking at by the end of 2018 that we would have a good net over the city where we could start offering service. We have an offer service as a paid service yet we allow the guest service and we allow our friendly good customers to go ahead and use the access points in the coverage that we have now. But again that's not throughout the entire city. We hope to have that done by the end of 2018.

Christopher Mitchell: Aside from the benefits from the rising property values what are some of the other benefits have you seen any local employers that are really excited about this or any new employers coming to down.

Ernie Staten: We have 18 new businesses that have actually come into Fairlawn that have made the statement that they came here for FairlawnGig. So most of those businesses are small business that are attorney firms engineering firms maybe small I.T. firms. We did just have one company come in with 72 employees. That's an I.T. firm. They have a very good payroll they'll be a great tax payer for the city. So that was you know again one of those driving forces that we were hoping to see happen. On the flip side of that we set up meetings every single month to meet with the business owners and we set up a small lunch in hoping that that we get to hear from businesses that are currently in the city and we have. We've heard from many of them that they're growing their business and they're growing it because they have such better conductivity. So in our area they just didn't have the kind of activity that is needed to really build your business. So we've seen that and then we've also heard from a lot of young professionals that are looking for a place to live here in the city and here at the service department we have a unique situation. We actually have a trash compactor here where people bring their trash to us which is an unheard of probably anywhere. But what it does for us it gives us the ability to meet with almost all new homeowners. They come in we can explain FairlawnGig and we can explain the trash service. So when that happens we've heard from many of these younger families coming into our town saying this is the reason why we're moving here is FairlawnGig so loser.

Christopher Mitchell: Those are really great stories and it's terrific to hear that through word of mouth so much is happening. Are there any other benefits you wanna tell us about.

Ernie Staten: We have a financial group here in the city. It's a fairly large firm that was looking to grow their business before we ever started Parentline gig. And this gentleman I met with him that owns a business explained what we have. We have him as a customer so he has decided to build a new building and when he went to our planning commission which I guess every every city every town has a planning commission. When he came into the planning commission his speech to the Planning Commission was he could have gone anywhere. And he looked at a land that was even less expensive that he was very enticed by. But what he found with Parentline gig was this is the reason to stay in our town. It's a reason why his business can grow. We found that financial businesses accountants really love this type of bandwidth because of all the heavy information that trying to get out so having a system that's symmetric gives him the ability to send large files out that pertain to customers and the speed that gives that he can use with Wall Street or any other trading.

Christopher Mitchell: And if I had to guess from my experience the reliability is probably a very strong factor also because you know I use some professional work. I know several people that engage in professional small business work. They're using a product that tracks their finances and things like that locally on their computer but then are accountants can access it at any time. If you have a service that's down occasionally well you may not be able to do your job. So you know I'm going to guess with your network you're probably really reliable and that's yet another benefit that you have.

Ernie Staten: That's right. We've heard that over and over again you know to speak about reliability a few things that I can say. You know we're we're a hundred percent underground network so that's already more reliable. We're a fiber optic network which makes everything more reliable. And then city owned. You know we're doing this for the businesses for the taxpayers. So our service level that we go out and repair or take care of our network is a much higher level than the incumbents because these are not only customers but they're taxpayers here so that that does make a difference.

Christopher Mitchell: Ernie, when we last talked you were planning on working with a provider that's also from Ohio from the Dayton area. I believe a local company called extra mile fiber but now you're running the network yourself. So tell me what's going on there.

Ernie Staten: Once we started the network what ended up happening is that both extra mile and the city mutually bought that it was in the best interest of FairlwanGig for the city to to run the network. So. So we've parted ways with the extra mile fiber and they did a great job. But will we. We had decided that there was a different path that we were going to go and so right now all services run out of the service department they run out of really my shop here. We hired a few employees. We hired a few consultants to help us out. And we've now taken on the entire data center all the way to the home or all the way to the business. A few things that I think that helped out with the city. You know obviously we had a revenue share with the extra mile. Now all that revenue does go to the city. Obviously that revenue is somewhat offset by the fact that we have employees and there was a service level that we were after and now we can offer that service level without really having a anything to hold that back.

Christopher Mitchell: Were you intimidated by the thought of doing that. I mean I think one of the reasons that holds communities back who are considering what you've done is they look at it and they think well you know we might only go into this if we have someone that's really able to hold our hand and that we can rely upon. But it seems like you got into it and then decided that you felt confident enough to go ahead and you know hire consultants but nonetheless you know if something went wrong it's you that has to answer those questions.

Ernie Staten: I mean personally I'm guessing actually I would say that in the very beginning it was intimidating and that's something that I believe extra mile helped us with the is that that we worked together on it and we realize that this is something that the city could take on and it could you know could come out of here. Farallones really unique and it's been unique for years so there's a lot of lot of ways that we service residents. Now that just felt like another piece of servicing residents now a few things that you brought it up earlier that we didn't have an electric heater at the city or we really didn't have a utility. So we have a private electric company. All of our utilities are private except for water and sewer and water is actually run by the City of Akron and the sewer is owned by the city but we actually saw that out so we didn't have a billing platform that was probably one of the most difficult pieces to this was to put that bundling platform in place. So we did. We now have a billing person that takes care of you know the monthly bills for us with customers and handles all the contracts with customers or businesses. So we now have a handle on it and I think that that helped us step over. Now I can tell you that I'm the service director so you know I have to handle everything from snowplowing our roads to handling our sewers or managing our sewers too. Now this network. So I don't know everything with a network like this but hiring those consultants to help me through some of this one gentleman that watches over that data center that is was a very important piece and I wouldn't have felt comfortable doing it without knowing that I could bring someone in that had that ability.

Christopher Mitchell: The final question I'd like to ask is just you know have you had any challenges in terms of not offering television service youth league that's holding some people back from subscribing or how have you dealt with that.

Ernie Staten: As someone who's focused on high quality data and phone service I do believe television just getting customers. And here's why the community is split about 50/50 with people over 60 years old. I believe some of the older residents still have a hard time going away from TV and streaming cable TV and going to streaming is what I should say I guess. So that that has hurt a little bit. But what we've noticed is this uptick on how streaming is working and people are just now starting to understand streaming and they are calling us for this incredible network. One thing that we did from the very beginning is on our Web site every week we send out a newsletter and in that newsletter is a different way to stream a different way to see TV. We always hit the streaming beast so anyone that would like to look at our Web site to get information on streaming. I mean it's for everyone obviously but we're pushing it towards Fenelon residents. That has helped. We've had many streaming events where we allow people to come and update like 75 people get to come in and learn about streaming. I have a group of people that help help teach our seniors through our. We had a special meeting just for our council members. We've had meetings for just certain areas of the city where we've tried to help them through the streaming piece. I do believe by the way everything looks it's streaming is obviously the future and that's why we stayed out of the TV business from the very beginning.

Christopher Mitchell: Great. Well I have to say that I'm enthusiastic. I really hope that you're able to keep racking up these wins. I certainly hope that your neighbors I know that you serve a little bit outside of town but it sounds like you're ready to share it with your neighbors. And I hope that that's something that's able to continue so that more of northeastern Ohio gets better service.

Ernie Staten: Yes we do too. We're actually in discussions with almost all of our neighbors and even even with people or communities that are quite a ways away. So there's a few communities near the Columbus area that have reached out to us and ask if there's a way that we could help them through if not run it at least give them really the game plan on how to do it. So I think I think it is starting to branch out and I'm with you I hope this takes over Northeast Ohio

Christopher Mitchell: Great well thank you for coming on the show.

Ernie Staten: Thank you.

Lisa Gonzalez: That was Christopher with Ernie Staten talking about the network and Fairlawn, Ohio, to go back and listen to our other interview with Ernie. Check out Episode 201 from May 10th 2016. We have transcripts from this and other podcasts available at MuniNetworks.org/BroadbandBits. Email 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. Subscribe to this podcast and the other ILSR podcasts --Building Local Power and the Local Energy Rules. podcasts you can access them on Apple podcasts, Stitcher, or wherever else you get your podcasts. Never miss out on our original research. You can subscribe to our monthly newsletter at ILSR.org. We want to thank Arnie Huseby for the song "Warm Duck Shuffle" licensed through Creative Commons, and we also want to thank you for listening to episode 292 of the Community Broadband Bits podcast.

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