Transcript: Community Broadband Bits Episode 30

Thanks to Jeff Hoel for the transcript of Episode 30 of the Community Broadband Bits Podcast. Jason Bird, the Electrical Superintendent of the City of Princeton, Illinois, explains how the city saved jobs and created a unique network that provides broadband over powerlines. Listen to this episode here.

00:15:

Lisa Gonzalez:  Hello, and welcome again to the Community Broadband Bits Podcast, a production of the Institute for Local Self-Reliance.  I'm Lisa Gonzalez.

This is our 30th episode.  This week, we meet Jason Bird, Electrical Superintendent of the City of Princeton, Illinois.  Princeton's municipal network serves local government, businesses, and residents.  Jason tells us how the city built the network, as a way to retain jobs when one of the town's biggest employers was poised to relocate.  Christopher and Jason also talk about Princeton's broadband-over-powerline network, which delivers basic, low-cost access to residents and small businesses.  Princeton's story gives us another example of how a community doesn't have to make a huge investment to reap the benefits of a municipal network.

01:00:

Christopher Mitchell:  Jason Bird, thank you so much for joining us for Community Broadband Bits.  We're excited to learn more about what you're doing in Princeton, Illinois.

01:08:

Jason Bird:  Well, thanks for having me.

01:09:

Chris:  Absolutely.  Can you tell us a little bit about Princeton, to get started?

01:12:

Jason:  Yeah.  Princeton is located in north-central Illinois.  We're a small, rural community.  Princeton is the county seat in Bureau County.  And we're the largest city in Bureau County -- of about 7,800 people.  So, we're fairly small.  We're -- the area is driven by agriculture.  But some light manufacturing in the area.  But Princeton is a pretty progressive community, for a small community.  We are located on Interstate 80, and we do have a Burlington Northern railroad tracks that goes through here, along with the Amtrak.

01:49:

Chris:  I see on the website that you're listed as an electrical superintendent, but I'm guessing that you do a lot more than just electricity.

01:59:

Jason:  Ah, yes.  The city itself has, you know, all the basic services.  We have water and sewer.  And we do have our own city-owned hospital, library.  But we have an electric utility, along with a telecommunications utility in Princeton.  Which makes us a little unique in Illinois.  There's not a lot of cities that have their own electric utility, and then do the combination with the telecommunications.  And we're one of the few that does that.  It is a huge benefit to have our own electric utility.  It keeps local control, you know, on our rates and rate structures.  It is done locally, which is a benefit to our customers.

02:36:

Chris:  And so, let's delve a little bit into the telecommunications utility.  How did that get started?  

02:41:

Jason:  Well, it got started -- quite honestly, we had -- our largest electric and water customer left in 2005, or 2004.  And then we had our second-largest customer -- at the time, it was our second-largest, and it became our largest -- it came to our Council and said that there were some concerns here, and that if they were looking to locate at that time, Princeton would not be on the map.  However, if they were looking to relocate one of their current facilities, Princeton may be one of the first ones that could be going.  We were looking at, in a matter of less than a year, of about 800 jobs being lost in Princeton, which is about 10 percent of our population base.  Which would be devastating for us.  And their reason that they were struggling was the lack of telecommunications.  Now, the first company that left had nothing to do with telecommunications.  But the second customer that expressed some concerns was due to the telecom.  Our City Council had -- got together and made that decision to do something on the municipality side, and get involved in telecom, and cover our large, commercial/industrial customers.

But, being a small municipal, one of the things we always consider is, what can we do for everybody?  So they had me go out to Manassas, Virginia, to take a look at what, at the time, was the only BPL-run service by a municipal in the United States.  So --

04:11:

Chris:  Right.  That's "broadband-over-powerline," for the uninitiated.  It's long been viewed as a low-cost way of delivering, you know, this Internet service over an existing facility you already have.

04:23:

Jason:  Correct.  And what made it nice was the fact that we own the -- you know, the power lines.  And then we own the poles.  And it was a real accessible way for us to get the equipment on there.  We had crews that were qualified to install it.  And, as I was in Manassas, Virginia, the City Council had voted at a Council meeting to proceed with the fiber.  And then, when I got back, to give them feedback on the broadband-over-powerline technology, and if I felt that it was worth moving forward on.  And then we would do that on the residential side.  And that was towards the end of October.  And the request that they made was that they wanted this done by the end of December.  So, they gave us about six weeks to get this done -- the initial 12 miles of fiber up.  We did do it.  And by the end of December, we hooked up our first fiber optics customer.  And early the following year -- I believe it was 2005 -- we started our testing of the BPL, on the residential side, and then by March-April, somewhere in that neighborhood, we started offering BPL as a service to our residential customers.  Where we see that BPL has been real successful is, some of the people that are, you know, lower-income people, and they want a -- they want high-speed broadband services, but they want it at a low cost.  And they're doing minimal things on the Internet.

05:47:

Chris:  Right.  I sort of envisioned sort of fixed-income, older people.

05:51:

Jason:  Yup.  You know, it's just somebody who wants to send e-mail to their granddaughter out in California.  And, you know, they're not streaming movies and things like that.  It's not going to work for that.

06:01:

Chris:  And so, for the fiber line, I'm curious.  There must have been aerial, for you to do it so quickly.  Just to get a little bit technical, did you end up putting that in the electrical space on your poles?  Or did you put it down in the communications space?

06:14:

Jason:  Nope.  We put it up right along our neutral in the electric space.  We do have a joint ownership of poles with the phone incumbent.  So we wanted to stay out of the -- out of what would technically be their part of the pole.  So we stayed in our -- in the electric part of the pole.  And most of it is overhead.  Currently, today -- I mean, today, we're looking at somewhere between 25 and 27 miles of fiber optics in Princeton.

06:47:

Chris:  OK.  And now, as I understand it, you have a private-sector partner working with you on that.  Is that right?

06:53:

Jason:  Yes.  That is the one thing the City Council decided right from the get-go, is that they did not want to be the ISP.  You know, they wanted to find somebody who had that knowledge, and form that partnership.  You know, one of the things that concerns any municipal is, you know, if our customers perceive we're providing a poor service, a lot of times they perceive all services as being poor.  So we wanted to kind of avoid that.  We wanted to find somebody who -- that was their business.  So we sent an RFP out.  We had four responding companies to our request.  And we selected Connecting Point / IVNet, out of the south Peru area.  And they were, you know -- already provided quite a few of our customers services in Princeton already.  And, when we did some research with, you know, some of those customers that they were serving, we felt that they fit our model, and what we felt was important.  And, you know, customer service and satisfaction is one of the top priorities we have.  And we felt that they met that need.  And they were selected.

We do have two different agreements, one on the fiber optics and one on the BPL.  Part of the agreement was, the city would own and operate -- or, would own and install -- all the fiber optics.  We would install the BPL, but the ISP would own the BPL equipment.  So we had a true cost-sharing on it.  And then we also do a true cost-revenue sharing on it as well.  On the fiber side, we're -- the city's going to get a little bit more, because it's our fiber optics.  On the BPL side, they're getting a little bit more, because it's their equipment.  And we've been working together since 2005, and it's really been a great relationship.

08:37:

Chris:  And, presumably, if, for some reason, in the future, if this company was not meeting its obligations, then, because you own so much of the network, you would be able to renegotiate with them, or to bring in someone to replace them.  Is that correct?

08:53:

Jason:  That's absolutely correct.  Yes.  The contract is reviewed every three years.  And so, yeah, we -- if -- there is a provision in there for either one of the parties to back out, or both parties to back out, if they felt they needed -- you know, felt they needed to do so.

09:10:

Chris:  OK.  Let's jump back in, a little bit more in the beginning, and go over how you financed this network.

09:15:

Jason:  We financed it initially -- it was -- the electric utility was -- we were providing the labor to install that.  So, you know, the majority of the cost was coming from the electric utility side itself.  With the understanding that that "loan" would be paid back to the electric utility.  Keep in mind, the BPL equipment was paid by the ISP.  So, you know, we didn't have to worry about that cost.  We had to worry about the cost of installation.

So, the installation was done through a loan, through the electric utility.  Several years later, we did receive a grant, through the state of Illinois.  It was a technology grant.  We had worked on that grant with Connecting Point.  So we did a -- when that grant was received by us, what we did is, we took those funds from the grant, and paid the electric utility back.  Therefore, any debt that the telecom side of the business had was taken away -- was gone at that point in time.

10:19:

Chris:  So, what do you do with the new revenues as they come in?

10:22:

Jason:  The new revenue -- it goes -- it's a telecom revenue.  And that funds our budget every year.  And, quite honestly, from -- pretty much from the beginning, we were able to find enough revenue to fund the budget.  Every year.  And we might make $1,000 or so.  But, you know, we're a nonprofit entity anyway, so our model is not to make a lot of money.  We were here to provide a service that was lacking in our community.

I will say that, once we made that decision -- and we went public with it, that we were going to provide BPL and fiber in Princeton, our phone and cable incumbents, all of a sudden, decided that they were going to put fiber optics up, and provided better quality of services here, that they were lacking in the past.  And it truly gives our customers an opportunity to pick between, you know, multiple services.  And if somebody's not performing, you know, they can change.  And I think that's -- you know, that was what we were hoping -- one of the goals we were hoping for was to bring some true competition here in the community.  Give our customers a choice.  And, you know -- and we did that.  And I think that was, you know, part of the success of the project.

11:37:

Chris:  When you say the incumbents invested in fiber optics, I'm guessing that they invested in that in terms of making their mostly middle-mile type -- within their core networks.  You don't actually have any fiber-to-the-home from the private sector there, do you?

11:53:

Jason:  I don't believe there is any fiber-to-the-home on the private sector.  What I should say was, prior to us making that announcement, if you were a residential customer in Princeton, all you could get was dial-up.

12:07:

Chris:  Oh, OK.  Wow!

12:08:

Jason:  If you were a large, commercial/industrial customer in Princeton, and you wanted a T1 line over copper wire, you were going to pay around $1,500 a month for it.  Once we made that announcement, there was some infrastructure improvements by both the phone and cable incumbents.  DSL then became available.  Cable modem then became available.  Prices on T1 lines drastically dropped from the competitors.  And, again, it was -- it's a win-win for everybody in the community.  We obviously want people to hook up to us.  But, you know, we make it a better community with more options and more telecommunications services available to them.  And that makes it good for the community as a whole.

12:57:

Chris:  Right.  That's one of the things that we're often trying to get people to understand, is that when a local government is involved with this, or a locally-owned utility, you know, they recognize the benefits of just improving access for everyone, even if they're not taking service.  And so, the community does better because there's DSL available now, and there's better cable available.  And so, that helps the whole community to grow, and it achieves the purposes.  So I do think that's a very important point.

13:26:

Jason:  It -- and, again, that's just -- you know, as a municipal utility, that's our model, and how we run our business.  And, you know, I will say that the company that had approached our City Council, with some current concerns about lack of telecommunications services here, was the very first customer we hooked up on the fiber.  And then they turned around, a few years later, and made about a $6 million investment in the business.  So, we went from potentially losing about 300-400 more employees to a company making a large investment, hiring local contractors, and, you know, buying equipment and material.  You know, some of that equipment and material were purchased from local vendors.  Which is all a benefit to the community, through sales tax, etc.  And the fact that they didn't close the doors and leave, and we, you know, have several more homes sitting empty, and people trying to sell those houses.  We look at that as a success.

And, you know, some of the other things that came along, that there really wasn't a financial gain out of it --  University of Illinois extension, the city of Princeton, and Connecting Point -- we did a videoconferencing center.  And Princeton was selected as one of the sites in Illinois to do -- visit your troops over Thanksgiving and Christmas.  Those are things that made, definitely, a benefit and a plus to our community.

14:45:

Chris:  So, you've been expanding the network over the years.  You connected -- you, obviously, have the BPL.  And then you connected the one business with the fiber.  But since then, I gather, you've expanded that fiber network.  Can you tell us who else you've connected.

14:57:

Jason:  Oh, absolutely.  We've got probably about 75 of our commercial/industrial customers hooked up to our fiber optics.  Our local hospital.  Our grade schools.  A majority of the banks in town.  What we do with them is that if they have multiple branches, is, we do a fiber ring, and we connect all the buildings together off of one fiber, and then they can get Internet service, if they want to, through one site, and then share it through all the branches with that ring.  About a year or so ago, we made a bid on the grade school, and we felt we were very competitive, and we got the job, and we saved them about $150-$200 a month on the Internet services.  We're helping the tax dollars out by saving the school $200 a month in Internet services.  And, again, we've got about 75 of our commercial/industrial customers.  We also have about 8-9 residential customers that have fiber-to-the-home.  We have a gentleman that lives in town who does some work for NASA.  And he needed some high-speed broadband services to his house.  We said we'd have it there in three days, got there in three days, and hooked him up.  And then we partnered with him, where we allow him to put his server in our POP site.  You know, that's been a great partnership, with potential research.

16:15:

Chris:  And so, with the schools, do they have a WAN?  I'm always curious, because I think a lot of people just don't understand that just the benefits of having a super-fast connection local to the schools, which doesn't even have to incur any transit charges on the Internet, ...

16:29:

Jason:  Right now, we go into the junior high's school.  We're hoping at some point we can link the four grade schools, the superintendent's building, and junior high together, off a fiber loop -- fiber network.  And all the infrastructure is there.  As a matter of fact, when we first got into the business, we made provisions, and put some underground pipe to each one of our grade schools.  What we want to do is tie them all together.  And then, at one point, we can provide them the Internet.  And then they can get it at all their facilities through that one point.

17:00:

Chris:  OK.  Excellent.

17:02:

Jason:  We started off with about 12 miles of fiber.  Today, we're up to about, you know, between 25 and 27 miles of fiber.  And we continue to build out.  We do have about 8 residential customers that have fiber-to-the-home.  We hope at some point that that's, you know, our future is to move to that.  We also have now got a fiber connection to the outside world.  Connecting Point, city of Princeton partnered with KDL and Windstream to get that connection to the outside world.  We -- you know, our bandwidth can easily ramp up as we grow.  And it has.  We're up to -- we're purchasing 50 megabytes of bandwidth.  And we're to a point where we're going to have to make that next jump up.  So this is continually growing.  And we've been able to continue to be competitive.  We may not be the lowest, here, in price.  But we're competitive enough for getting a lot of the bids, when companies are asking for -- you know, us to compete against the phone and cable incumbents.  And I think a lot of that has to do with the fact that our service -- we feel our service is superior.  We have local crews here.  Just like in our electric -- you know, our electric services.  When people call, they get a real person on the phone.  And they're literally five minutes away.

Fiber's no different.  If there's a problem, they call us.  We're five minutes away, and we respond, and we take care of the problem.  we also have -- the other thing we've done with this fiber -- owning our own fiber -- is, we have multiple agreements with Kentucky Data Link, where they're leasing some fiber for us, and their service, and, you know, several -- actually, quite a few -- cell towers.  But that fiber goes through Princeton.  And so, we lease that fiber to them.  And we, you know -- part of that leasing agreement is, we're going to maintain that for those guys.

18:53:

Chris:  OK.  Are there any other benefits?  Or anything else we should know about this network before we end this conversation?

18:59:

Jason:  Well, I mean, I think, any time, any city who's got, you know, the fiber network in their community -- the benefits are endless.  I mean, if you're looking for some call centers, you know -- economic growth -- if you're looking for those kind of jobs to come to your town, we don't have to build that infrastructure.  It's already here.  So, we're ready for that kind of, you know, growth, if somebody comes to our community and is interested in Princeton, and needs that high-speed bandwidth, you know, we're ready to provide that.  It's not something that they have to wait 6-8 months to get.  They have to wait 3-5 days to get it.  And so we see that as a huge benefit to our community.  And, you know, as I said, we're located on Interstate 80.  We have Amtrak that comes through here.  We're 50 miles away from the quad cities.  We're 70 miles south of Rockford.  We're 50 miles north of Peoria.  So we've got a lot of large cities around us.  And, you know, we feel, at some point, some of that growth is going to come this way.  And we're on a major highway.  And the fact that we have our own telecommunications services, we have crews that can go it, you know.  And they got one person to come to, one phone number to make a call to, to get the answers they need.

20:09:

Chris:  Well, we're excited that it's already been benefiting the community so much.  And we'll look forward to learning more about it.  I hope you'll let us know as you make more progress.

20:18:

Jason:  We will.  Thank you very much.

20:20:

Lisa:  That was Jason Bird, from Princeton, Illinois, visiting with Christopher.  For more detail on Princeton's story, visit muninetworks.org and follow the "Princeton IL" tag, where we have stories on both the fiber and BPL networks.  If you have any questions or comments, please send us a note.  E-mail us at podcast@muninetworks.org .  Our handle on Twitter is @communitynets .  This show was released on January 22nd, 2013.  Thanks to the mojo monkeys for the music, licensed using Creative Commons.  The song is called, "Bodacious."