Transcript: Community Broadband Bits Episode 331

This is the transcript for episode 331 of the Community Broadband Bits podcast. For this episode, Christopher speaks with Kimberly McKinley, chief marketing officer for UTOPIA Fiber in Utah. They discuss the open access fiber network's recent successes and how marketing has played a key role in growing the network. Listen to episode 331 here.

 

 

Kimberly McKinley: We have worked diligently to make sure that people are aware of our service and how you can get it. And right now, UTOPIA Fiber is the highest rated telecommunications provider in the State of Utah.

Lisa Gonzalez: This is episode 331 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. The Utah Telecommunications Open Infrastructure Agency, also known as UTOPIA, began when communities in Utah's north central region banded together in 2004. They got together to develop an open access fiber network. Over the past 14 years, they've experienced ups and downs, been attacked by the anti-muni sect, and through it all, gained a wealth of knowledge. In recent years, the project has definitely been on the upswing, and this week Christopher talks with Kimberly McKinley from UTOPIA. They talk about some of the accomplishments UTOPIA has made as it's expanded, the products they offer, and some of the changes they've made. Kimberly and Christopher discuss how UTOPIA's fresh approach to taking control of their marketing has driven a good portion of their success. She offers advice for communities that aren't used to operating in environments where competition demands reaching potential customers. Now here's Christopher with Kimberly McKinley from UTOPIA.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance up in Minneapolis, Minnesota. Today I'm talking to Kimberly McKinley, the chief marketing officer for UTOPIA Fiber in Utah. Welcome to the show, Kim.

Kimberly McKinley: Well, thank you for having me, Chris. It's exciting to be here.

Christopher Mitchell: I've really enjoyed seeing your presentations in a variety of places — I think probably both coasts and in the middle a few times. But tell us a little bit for people who might be thinking, "UTOPIA? That's interesting." What is the UTOPIA project?

Kimberly McKinley: The UTOPIA project is a interlocal agency based here out of Utah. It's an 11 city open access network based out of basically Salt Lake. It's Murray; it's a little suburb of Salt Lake. And we've been doing this project since 2004.

Christopher Mitchell: And this is actually — I mean, in some ways, you were the ones that kicked off the whole anti-municipal broadband movement because of the opposition you face. So it's been a project that, as we'll discuss, is succeeding despite some pretty heavy hitters trying to shut you down.

Kimberly McKinley: You know, we've had our history as most people are aware. I've been to a lot of these conferences, as you've mentioned, and it's interesting as I sit in presentations how people speak about UTOPIA and how we are a failure, and I kind of chuckle to myself because I know otherwise of what is actually happening on the UTOPIA network.

Christopher Mitchell: Right. I think a lot of people just aren't aware of the past few years because you certainly wouldn't dispute that UTOPIA really had a few rough years.

Kimberly McKinley: No, not at all. We were bleeding edge when this network started in 2004. It was a little bit ahead of its time. When this project started, nobody understood. Facebook wasn't out there. YouTube wasn't out there. Nobody understood the need for the bandwidth, which we are currently seeing today.

Christopher Mitchell: Well, and you mentioned that there is 11 cities. Let's talk a little bit about one of the signs of success, which is [it] seems like you're getting invitations to expand that.

Kimberly McKinley: We are. We currently have about 20 feasibility studies out in the marketplace right now. We just announced that we are going to be building a network down in a small little community in Utah called Woodland Hills. We have started construction in the past week on that network. I think our timeline is to have that all built out by the beginning of spring.

Christopher Mitchell: And I understand that you're going out of state. I saw a press release that you're heading into Idaho Falls, I believe.

Kimberly McKinley: Our relationship with Idaho Falls is a little bit of an interesting one. We are just consultants on that project. They contacted us because they knew that we understand how to do open access networks and what the pitfalls are on these kind of networks. So we're just helping them stand up their network and just showing them what do you should and shouldn't do because everybody understands we know both sides of that story.

Christopher Mitchell: Right. Well, I guess I need to read my press releases more closely, a classic error I'm sure. But the overall news that you're getting, you said, 20 some feasibility studies — I mean, this is something that is pretty new and different, I think, right? I mean, the dynamic in Utah, I think you actually said in one of your events, was that when you would enter an event you might not be excited to be wearing your UTOPIA shirt and now it's a lot more popular than it used to be.

Kimberly McKinley: No, that is, I think, the classic story that I like to tell. When I started working at UTOPIA back in 2010, if I walked into a store with a UTOPIA Fiber shirt, people would tell me what they thought of UTOPIA and how the government should get out of this space and it was just not a proper role of what we were doing. And if I go into, wearing a UTOPIA shirt, to any place now, everybody asks me, "When is it coming and how can I get it?" So it is definitely a turnaround in eight years, and it's been a dramatic turnaround.

Christopher Mitchell: Well, and as you, the marketing person, I'm guessing you distinguish this: my impression is that its customers have always been pretty happy with it, but they've been few and far between for, as we mentioned, the historical reasons that we have covered in past podcasts and many others have discussed. The people have always liked the service. I think you've been smeared, and finally the truth is outrunning those smears. You think that's an accurate way of summing it up?

Kimberly McKinley: I think that is absolutely an accurate way. I think the most frustration that people had is because they didn't understand the politics behind what was happening and why they didn't have it in their neighborhood. And I think that is all changing now as we are growing at our fastest pace in UTOPIA's history.

Christopher Mitchell: Well, it sounds like there's multiple ways that you're expanding. And you mentioned the consulting is one thing, which I know that UTOPIA has long been willing to offer advice to cities in a variety of mechanisms, but can you sum up the ways in which the UTOPIA network is expanding currently?

Kimberly McKinley: You know, there's a couple ways. Layton City, they just did a bond to finish building out their network within two years. They saw a huge demand from their residents saying that they wanted the service and they did not want to wait any longer, so Layton City took it upon themselves to issue the bond in order to speed up the delivery of that service.

Christopher Mitchell: And I think roughly half of your cities have universal service now, right?

Kimberly McKinley: Approximately about half. The larger cities are the ones who have the most to be built out still.

Christopher Mitchell: Right, so Layton is showing one model for that. I think in a number of those other ones, if a person wants access, they're paying the upfront connect fee now. Is that right?

Kimberly McKinley: No, we still have that option that is out there, but our most popular option in which somebody can sign up to the UTOPIA network is that they pay a $30 a month fee to UTOPIA and then they choose the service provider which they want. But the all-in costs for most people who sign up on the UTOPIA network is $65, and that's $30 to UTOPIA and $35 to one of our service providers, and that will get you a 250 Meg connection, up and down.

Christopher Mitchell: You know, I think I've done 331 of these interviews, something like that, and as someone stuck with a cable monopoly, I'm a little bit annoyed every time I hear about these wonderful options elsewhere.

Kimberly McKinley: One thing that we just announced not too long ago is our 10 Gig residential service that starts at about $230 —

Christopher Mitchell: Oh, pile on.

Kimberly McKinley: — yeah, $230 a month, and we do have customers on that. And I frequently ask, "what is it does somebody use with a 10 Gig service at home?" but we still have people who are interested in signing up for it.

Christopher Mitchell: Well, I think I would like one of those connections for at least maybe like an hour to get my photo collection in the cloud, but beyond that I agree. It seems a bit of overkill. So the Layton model is one, but you've recently gone to the bank and come away with funds to expand, you know, in a different model. Can you sum that up for us?

Kimberly McKinley: Luckily, UTOPIA has had its history, but this past year for the first time in UTOPIA's history, we went to the bonding agencies and we bonded for approximately $23 million based off our revenues and not city backing.

Christopher Mitchell: So for people who aren't as financially strong in their background, you know, I think that's a significant sign of confidence from the investors, right?

Kimberly McKinley: Absolutely. Absolutely. I think that what we've done for the past eight years has really kind of dictated what people feel about us and how we can move forward in this model. So it's a huge victory for everybody who's been watching this project for many, many years to say that this was even a possibility 10 years ago.

Christopher Mitchell: Speaking of how we've documented that things have changed, you mentioned that you're winning a popularity contest. That's the way a monopoly might have phrased it. What's going on there?

Kimberly McKinley: We have. We have worked diligently to make sure that people are aware of our service and how you can get it. And right now, UTOPIA Fiber is the highest rate of telecommunications provider in the State of Utah. If you look on Google reviews, we're currently at a 4.4. I think Yelp, last time I checked, we were at a 4.5, and this is totally different than the [where] incumbents are in our market. It's exciting to see how much our customers love us and support us in the marketplace.

Christopher Mitchell: I think one of the things to think about is how that's achieved. So we're going to talk now about marketing, which is where you're strongest and I think perhaps most passionate. You know, what does one have to think about? You're one of, I think, roughly 30 - 32 municipal open access networks. What's different about marketing a UTOPIA than a closed, triple-play kind of network?

Kimberly McKinley: I think this has been an interesting journey for UTOPIA. It is the one I'm most passionate about. This is what I do and what I love every day. We had our morals and we had all our standards of, "If we build it, the service providers will market." Well, it turns out that didn't happen, so what we've done in the past 10 years is really taken the marketing in-house. And we say that this is the UTOPIA brand and we market first and we market our ISPs on every piece that goes out, but we have to be the one who lets the consumers [know], who makes the consumers aware of who we are and [why] we're here and that our cities did this for them and for their future. So it's an interesting role. As I've gone to a lot of these industry events, a lot of people build these networks and they don't understand the importance of marketing, but this is — our network spans 130 miles along the I-15 corridor here in Utah. And it's hard to say [with] 11 cities along that route, "You can just build it and people will come," so we've really taken more of an active approach on this. So we send out mailers, we have direct mail, we have billboards, we have Pandora ads, we have Spotify, Facebook. So we're everywhere to make sure that people are aware of who we are and why we're in this space.

Christopher Mitchell: Now you started there in 2010, so I'm going to guess that first of all there was not a marketing budget of substantial amounts. How did go about internally making the case that this was a worthwhile investment for scarce funds?

Kimberly McKinley: I think it took awhile. I think the marketing budget has definitely grown over the years, but I think success has dictated that we can increase the marketing budget. This year will be UTOPIA's best year, and it will be the year we spent the most on marketing. We are approaching that we're adding 5,000 additional customers by the end of 2018. So that's a huge accomplishment, and I think that goes back to [how] the people and the stakeholders are aware, as they see the results, that marketing is more and more important in this space. And I don't think a lot of cities — when they get into this, they don't understand that. But we have to approach it as a business and not necessarily as a governmental agency because we're not necessarily like a municipal power company. We are competing against major companies, and we can't just sit by and let them dictate the message out in the marketplace.

Christopher Mitchell: Have the ISPs liked this marketing that you're doing? [Do} any of them have any different reactions? Is there sort of like a split among them, I'm curious, at all?

Kimberly McKinley: You know, no, I don't think there is any backlash from us marketing from our ISPs. They have the ability to market on their own, and we encourage it. I am just never going to be dependent on them marketing. I can't be dependent on the growth of UTOPIA on third party entities that are a part of this network.

Christopher Mitchell: I seem to recall there being a UTOPIA RV. And so I'm curious, you know in your marketing, you mentioned a lot of advertising. Does the marketing go beyond advertising or is non-traditional?

Kimberly McKinley: Yeah, no, absolutely. We do not have the RV anymore, but we do have a demonstration trailer. And we have a demonstration trailer with TVs, iPads, and we take it to community events and we take it to festivals throughout the community, so when we go, that people can test the connection and understand the difference that UTOPIA brings once they have it in their house. Because you never want to buy a service necessarily without testing it out, so we want everybody to have a hands on approach before they sign up if they would choose to do so.

Christopher Mitchell: So as we're coming toward the end of our conversation, I'm curious, [to] sort of just end on the hopeful note of expansion further. What is the rate of expansion that you're experiencing currently?

Kimberly McKinley: You know, UTOPIA is growing at its fastest pace ever. It's probably a little too fast for us marketing folks, if that's ever possible. But we're passing about a thousand homes, opening a thousand homes additional a month on the UTOPIA network, so it's an exciting time to be a part of UTOPIA to see the growth that we're experiencing.

Christopher Mitchell: Yeah, I think that that actually means that every year your network is growing by a larger amount than most of the open access networks have total customers.

Kimberly McKinley: It's an exciting time. It's an exciting time to see the open access networks growing throughout the country. It's a platform that when I started at UTOPIA, I didn't think that you would see the growth that we're experiencing, but I'm seeing more and more communities who are embracing the open access networks.

Christopher Mitchell: Okay, so I'm intrigued then. Let me just quickly ask you. Everyone looks at open access and I think they primarily think, "Oh, I'm going to get cheaper access." What is the biggest benefit of this model from someone who's sitting inside of it?

Kimberly McKinley: I think the biggest benefit that I would see is people have choice. And by choice you drive up — the prices do go lower as you mentioned, but the quality goes higher, and if you are not satisfied you can just move to another provider and they can help you out. But it's about choice and it's about free market, and we believe here at UTOPIA that this is infrastructure and that municipalities should be building this infrastructure and letting private sector service providers run along those lines.

Christopher Mitchell: Thank you Kim McKinley for coming on the show to to tell us more about UTOPIA, a sense of what's going on. And as we're wrapping up, just remind us, even for people that might be located outside of Utah, you offer consulting services to help guide them along the way, right?

Kimberly McKinley: We absolutely do. We feel here at UTOPIA that we are probably in the best position of anyone in the country to warn people about the pitfalls of open access and help guide them through building their own networks. I always say that if there was a mistake to be made in the early years of UTOPIA, we've probably made it. We might even have made it twice. So we understand, and we can help open access networks in a unique way that nobody else can because we had the success that we're experiencing now, but we've also had the growth and the issues we had in the past.

Christopher Mitchell: Thank you so much. It's been fun, and I just have to say that I'm so excited to see this network succeeding because it deserves it after all the hard years.

Kimberly McKinley: It's fun to come to work. I always say, I call it the UTOPIA team here, is that it's never a dull day here and it's exciting to be part of a turnaround story and to be providing this service to our communities throughout the State of Utah and elsewhere.

Lisa Gonzalez: That was Christopher with Kimberly McKinley from UTOPIA. They talked about how things for the once struggling network have turned around. Be sure to check out our other content on UTOPIA at MuniNetworks.org. We also have transcripts for 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 podcast. You can access them wherever you get your podcasts. Don't miss out on our original research. Subscribe to our monthly newsletter at ILSR.org, and while you're there, take a moment to donate. Thank you to Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons, and thanks for listening to episode 331 of the Community Broadband Bits podcast.

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