Transcript: Community Broadband Bits Episode 345

This is the transcript for episode 345 of the Community Broadband Bits podcast. In this episode, Christopher talks to Jessica Slusarski from Marshall FiberNet about the Michigan town's new Fiber-to-the-Premise network. Listen to the episode here.

 

 

Jessica Slusarski: Nobody else wanted to build that. Nobody else wanted to be involved with something where there's no way to lock in the customers and make sure that it was a worthwhile investment. But we knew it would be, so we went through with it ourselves.

Lisa Gonzalez: Welcome to episode 345 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. When large corporate incumbent Internet service providers weren't interested in providing the quality of services Marshall, Michigan, wanted and needed, community leaders decided to do something about it. The small town in the south central part of the state deployed their own gigabit Fiber-to-the-Home network. Now businesses and residents are signing up, and local government offices are saving money while also getting faster, more reliable connectivity. In this week's podcast, Christopher talks with Jessica Slusarski from Marshall FiberNet. They talk about the why, the when, and the how behind this project that has transformed Internet access in one small midwestern town. Learn more details about the deployment at muninetworks.org, where we dived deeper into the project, and at marshallfibernet.com, where you can see what services they offer. Let's get to the interview. Now here's Christopher and Jessica Slusarski from Michigan's Marshall FiberNet.

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 speaking to another Upper Midwest denizen, Jessica Slusarski with FiberNet in Marshall, Michigan. And Jessica, you are the customer service and marketing manager in case you forgot. Welcome to the show.

Jessica Slusarski: Well, thank you.

Christopher Mitchell: Absolutely. So tell us a little bit about Marshall, Michigan, which I have to say, every time my fingers start to type "Marshall, Mi-" I immediately type "Marshall, Minnesota." So tell me about Marshall, Michigan.

Jessica Slusarski: Well, we're a small little community, about 7,088 — [as of the] last census — residents. We're a historic little community, and it's a nice, quiet little town.

Christopher Mitchell: Yeah, I know you're not far from Battle Creek because, just through the randomness of the modern world, one of my colleagues here, her parents recently moved to Marshall and are customers of the fiber network.

Jessica Slusarski: Oh, excellent. Yes. Yeah, we are not far from Battle Creek at all. It's about a 12 minute drive.

Christopher Mitchell: Tell me a little bit about what connectivity was like in Marshall prior to you building the fiber optic network.

Jessica Slusarski: Oh, it's about the same as it was 10 years ago, probably about an average of 2-12 Megabits per second. In a couple cases we can get up to 100 Megabits per second, but those cases are few and far between and very expensive.

Christopher Mitchell: I'm presuming you have cable from a private company as well as DSL. Is that accurate?

Jessica Slusarski: WOW and AT&T, they provide cable.

Christopher Mitchell: A private citizen in your community does have choices, but you still don't have very high capacity speeds prior to your investment.

Jessica Slusarski: Right.

Christopher Mitchell: So you decided to do what about that?

Jessica Slusarski: We decided to build our own network.

Christopher Mitchell: So what went into that decision?

Jessica Slusarski: Well, we had a lot of complaints and a lot of vocalization about how slow the Internet was in town, so city council kind of went about making sure that we were able to make that a little bit better. The director of FiberNet, Ed Rice, he knew about fiber optics; he's pretty well versed in telecom and electric. And he heard that doing Fiber-to-the-Premise was an excellent idea, and he asked for it and we got it.

Christopher Mitchell: And now, when you decided to move forward, one of the interesting things is that you are a municipal electric provider already, but it sounds like you didn't structure this in the way that many municipalities have in terms of it being a municipal fiber division underneath the electric division.

Jessica Slusarski: No, nope. We are our own department.

Christopher Mitchell: So then you report directly to the city council then or your board basically?

Jessica Slusarski: Pretty much, yeah. We do have a director and he's the same. It's Ed Rice, the director of utilities as well.

Christopher Mitchell: So tell me about your goals. One of the things that I saw is that you aim to have simple pricing, and I'm curious what that means to you.

Jessica Slusarski: We basically want to remain cost neutral. We want to be a service for our community, not necessarily a for-profit entity, so all of our pricing is transparent. We have a $50 deposit instead of a monthly fee for the equipment, so if they ever want to cancel service, they can bring back their equipment and get their $50 back. And our residential rates are as is stated on the website, starting at $40 a month to $200 a month, depending on what they want.

Christopher Mitchell: So if I sign up for 150 Megabits — I'm assuming that's symmetrical —

Jessica Slusarski: Yes, absolutely.

Christopher Mitchell: — at $60 a month, then each month I'm gonna pay you $60?

Jessica Slusarski: Yup.

Christopher Mitchell: That's revolutionary.

Jessica Slusarski: Yeah, $60 a month, that's it, 150 Megabits per second.

Christopher Mitchell: I was talking to a friend who runs a private network, who gets a kick every time I reference US Internet here in Minneapolis, and I think he said once something about how, you know, we've got these, like, calculators and things; we can figure out how to charge people the amount — you know, we know ahead of time what we're going to charge them and we can advertise that rate.

Jessica Slusarski: Yeah. We just want it to be as simple as possible, make it as easy and transparent as we could.

Christopher Mitchell: So how did you end up financing the network then? Because you know, you mentioned that you're not seeking a profit, but I'm assuming that the network is — you did say it was expected to break even. And so, you know, that's one of the challenges of running these networks of course. How did you end up financing it?

Jessica Slusarski: We started financing it through loans from the electric department and the local finance district. We got loans from both of those to finance the project and we expect to break even in about five years.

Christopher Mitchell: And so you have internal loans and then you're also basically doing what's a Michigan version of tax increment financing, it looks like, including some revenue bonds that will be paid back presumably by some of that. So when did you launch?

Jessica Slusarski: We officially launched February of last year.

Christopher Mitchell: Happy Birthday.

Jessica Slusarski: Why thank you. It is about that time, isn't it? Wow. Yeah, it is. It's been about a year. We've been officially for the most part done with construction and everything since October/November last year, so we whipped through construction pretty fast. And there's a little bit more to go and we had to halt on that because of the weather, which here in Michigan is a little buried right now.

Christopher Mitchell: Yeah, I understand that you've been having alternate cycles — I mean, up in Minnesota we've just had snow, snow, snow, but I understand you've been melting, ice storm, snow storm, melting, ice storm, snow storm. It sounds like it's been challenging.

Jessica Slusarski: Yes. It's been very snowy, and then as soon as that snow melts, it is mud and it is muck. And we really had to kind of take a breather on some of the construction because we're doing most of the plowing by ourselves. We do have a little plow that we do some of the underground work with, at least for as far as installing homes, and if we use that now we will destroy everybody's lawns.

Christopher Mitchell: Sure, and at the same time, you already have more than 20% connectivity. In one year, 20% connectivity is terrific.

Jessica Slusarski: Yeah, we are actually about — I think as of today, we have 840 customers, and there's a total of 4,000 and some odd customers available, at least residences and businesses. Yeah, we are getting there.

Christopher Mitchell: And one of the things that I know that Lisa had reported on previously in her story was that you were looking at a 38% take rate, but you have expectations of exceeding that, not just breaking even, but you know, having many more customers than you would need just to break even.

Jessica Slusarski: Yeah, since we already have 840 odd customers, we expect break through that. Most of the businesses and residences that are not connected are either waiting for us to get there. We do have some construction to do for the apartment buildings still in town, so those are expected to be completed by summer, as long as we do get permission from the building owners to create an entirely new infrastructure within their walls. Probably our biggest setback there is waiting for permissions from the apartment buildings. That'll bring in a lot of new customers. And then, just the fact that the contracts that the other providers in the area offer are so expensive to get out of. We do understand that it might be more worthwhile for them to just wait it out, especially when it's $300-$400 to get out of a contract just for a resident.

Christopher Mitchell: Have you seen any competitive response since you've been moving forward? Any upgrades from the providers that were already offering service?

Jessica Slusarski: No upgrades. I'm pretty sure that they're running at full capacity. Their speeds are not going to get any better. They do have fiber out here, but it's not Fiber-to-the-Premise. They're not going to be able to offer the same kind of speeds that we offer. The problem is that they're doing a lot heavier advertising, and we're trying to keep our prices low and as community friendly as we can, so we don't exactly have a big budget for that. And then, they are also able to significantly lower their prices and offer the triple play with phone and television, but those are both going by the wayside, so we don't expect that to hold up for long.

Christopher Mitchell: Do you have a sense that, offering straight up data, do you have a sense that many of your customers are then using other products? Like, are you encouraging them, to say, if anyone comes to you and says, "How do I get TV service?" and you say you could use X service or something like that?

Jessica Slusarski: Absolutely. Pretty much everybody working in the fiber department is a millennial and we all love Netflix and Hulu. And those are what we use, so we have no problem offering our own personal advice, which is another thing not the residents really appreciate is that we're not out to sell extra services. We just kind of give our recommendations off of what we personally like, and we're able to talk to them about those with no real bias because we're not making anything off of it. We just like it.

Christopher Mitchell: What kind of a reaction have you had from the community? You know, people going from a few Megabits a second to some dramatically better speeds — is there anything memorable?

Jessica Slusarski: We have had a couple of YouTubers and a lot of gamers — a lot of gamers — who appreciate it so much. We had a couple photographers who mentioned that their upload times are insane now. Same with the YouTubers. Lisa did mention in the article Sam Rodriguez, who I went to school with. He was working with 48 hour upload times for his YouTube podcasts, Twitch streams and now he can do it in minutes. And he's loving it; I know that. And then we do have a couple other YouTubers in town that are for-profit YouTube creators, and they're really happy with the service.

Christopher Mitchell: And I have to assume that just outside of town, probably, there's also a lack of high quality access. Are you seeing people thinking about moving into town? Are they demanding that you figure out how to expand after you've finished connecting everyone in town?

Jessica Slusarski: Yes. We do get a lot of requests to come out into the townships. And when people find out that we're not in the townships who are moving out into the townships, they are crushed, but they have to go. Because I'm pretty sure that the fastest that you can get in the townships is 2 to 12 Megabits per second. I don't think WOW is out there. I think it's just AT&T and they're, ooh, not very fast out here.

Christopher Mitchell: Yeah, and we don't expect them to be making any investments either. I mean, they're really trying to focus on their mobile service. So have you thought at all — I mean, is that something that's under consideration? Are you just focused on the present and not worrying about what comes next until you get there?

Jessica Slusarski: Oh, no, we've definitely been thinking about expanding out into the townships for a long time, but due to the restrictions in Michigan for expansion, we've been having a little bit of difficulty in getting out there. In order to get us out there, it's kind of up to the townships and not necessarily up to us in being able to do that.

Christopher Mitchell: Right. Well, before you could build of course you had to make a bid available, per Michigan law. When you made that bid available, did you have a sense of whether anyone would bid? Because just to reflect for people who aren't aware, you have to make a bid available and only if you don't have three competitive bids, are you allowed to move forward, if I remember correctly.

Jessica Slusarski: Yup, that's correct. We didn't have any bids actually, so we were allowed to make our own. We didn't know what to expect. We knew that it would probably be low because were pretty much demanding that there were no contracts, transparent fees, and nobody else wanted to build that. Nobody else wanted to be involved with something where there's no way to lock in the customers and make sure that it was a worthwhile investment, but we knew it would be so we went through with it ourselves.

Christopher Mitchell: There are further restrictions for you to be able to expand it where everywhere you go they also have to go through that kind of rigamarole.

Jessica Slusarski: Yes. Yup, so that includes the townships too. They would have to put out the same process. They would have to have the same meetings, put out their own CBA (cost benefit analysis). They would have to do the exact same process that we did, but then we'd be able to bid on that — same with the competitors, but I don't think they would want to put in that much effort for that for such small areas

Christopher Mitchell: Relating to customer service, my last question to you, which is your domain — you know, operating a small network, I got to think it's pretty challenging to figure out how to staff up when you're so rapidly growing the customer base. What are some of the tensions involved with creating a new ISP that's municipally owned and making sure you're able to handle the calls you get and things like that?

Jessica Slusarski: Woo. Yeah, we were down to just two people in the office for awhile and that was tough. We'd pretty much sit in the office all day and hammer out those phone calls, but we do have a call center now. It's actually through Coldwater, which is a town just south of us. They have their own — I think it's a DSL network and —

Christopher Mitchell: I thought it was municipal cable, but it's definitely —

Jessica Slusarski: Yes, they have their own cable, and they have a call center for that and for Internet. And they were able to take us on for after hours, so the three of us office personnel could go home and sleep at some point.

Christopher Mitchell: [laughs]

Jessica Slusarski: But it's actually been really great because we are Fiber-to-the-Premise. There's not a whole lot of outages. We have a lot of redundancy where we don't have a whole lot of technical calls, and a lot of them are just people wanting to know before they commit what it is and what they can do to get television and all that stuff. We do have a really high senior population, so changing from cable, which, you know, we've all been used to for the last 20-30 years into Netflix and streaming television has been a huge jump for a lot of people. But we are more than happy to explain, and we will even come out to your house and help you set it up. So we've been really happy with being able to go out there, and we feel like being a bigger part of the community is more important than, you know, anything. We want to be very customer service oriented no matter what your needs are, and we've been really focused on customer education as well. If anybody is having an issue with their Internet or connecting their printer or anything, we're able to help with that too. So we're not just going to hang up on you if we know it's not an issue on our end; we'll come out and make sure that our services are working for you as well.

Christopher Mitchell: I think that's one of the biggest benefits that a network like yours can offer. And you know, even me as a very technical person, there are times when I'm just tired of learning the new thing, you know, so it's great knowing you can get some help.

Jessica Slusarski: Yeah, and it's pretty funny because I was having some issues at my house hooking up — it was actually my printer; it's always a printer. And I was looking up how to fix it, and it was like, contact your ISP. And I was like, oh, okay, let me just call myself real quick. But you know, it's usually an issue with the device and it's really easy just to go over. It's a lot easier to go and help somebody than it is to, you know, tell them no, we can't do anything about it, and it's a lot better. And a lot of customers have been really appreciative of that, and we love it.

Christopher Mitchell: Yeah, I bet. How many of the people that are calling is their first question about TV, whether or not they'll be able to watch University of Michigan sporting events?

Jessica Slusarski: Probably about a third.

Christopher Mitchell: Yeah. I thought it might even be higher.

Jessica Slusarski: Yeah. Yup, at least a third. A lot of people are really concerned about — you know, we have a lot of people working from home, so they want to be able to utilize their actual Internet service instead of getting cut off. There's a lot of outages with the other competitors, which was a huge problem and why we wanted to do Fiber-to-the-Premise. But yeah, a lot of people want to know how to watch the Big 10 Network, especially.

Christopher Mitchell: The other question I forgot to ask earlier was, how do you get out of Marshall? Was there a network you could just hook into and lease? How did you handle that problem to get to the wider internet?

Jessica Slusarski: Oh, we went through Merit, and we're looking into another outside connection for a fail over option, possibly even a third connection. There's a lot of different ways that you can get out there. I know Cogent is a huge ISP for ISPs. There's quite a few but we went through Merit Networks to start off with, and they supply basically from Detroit to Chicago a lot of institutions, a lot of colleges. So it's a really solid network and we've been really happy with them.

Christopher Mitchell: Great. Well thanks for taking the time. When we first learned about you, we were desperate to find out more because we try to track these things. You guys kind of flew under the radar until you popped up and were already connecting customers. So I'm really glad you made some time for us to talk, to get an update and look forward to hearing more from you in the future.

Jessica Slusarski: Yeah, thanks so much. It was great talking to you.

Lisa Gonzalez: That was Christopher and Jessica Slusarski, from Marshall's FiberNet in Michigan, discussing the town's municipal gigabit Fiber-to-the-Home network. We 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 podcasts from ILSR, Building Local Power and the Local Energy Rules podcast. You can access them wherever you get your podcasts. Don't miss out on important research from all our initiatives. Subscribe to our monthly newsletter at ilsr.org, and while you're there, please take a moment to donate. Follow us on Instagram. We are ilsr74. Thank you to Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons, and thank you for listening to episode 345 of the Community Broadband Bits podcast.

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