Transcript: Community Broadband Bits Episode 445

This is the transcript for eEisode 445 of the Community Broadband Bits Podcast. Two members from the UTOPIA fiber team join us to talk about network expansion in 2020, and update us on what's been happening. Listen to this episode here, or read the transcript below.

Kim McKinley: In all the years that we've been doing this project, we've been saying we believe this is essential. We believe that this is infrastructure, that we have a role in this and really seeing the conversations switch. You don't have to try to convince people that this is essential anymore.

Ry Marcattilio-McCracken: Welcome to episode 445 of the Community Broadband Bits podcast. This is Ry Marcattilio-McCracken here at the Institute for Local Self-Reliance. This week on the podcast we connect again with UTIOPIA Network's CEO and executive director Roger Timmerman and deputy director and chief marketing officer Kim McKinley. 2020 was a year of explosive growth for what is now UTOPIA's 15-city footprint fueled by unprecedented demand. The network buried 1.7 million feet of conduit and 1.4 feet of fiber cabling driven by 10,000 new installations and over 500 new businesses. Chris, Roger, and Kim talk about the process of bringing new communities online across the state of Utah with member cities hitting revenue marks ahead of schedule and pushing smart city applications to measure and improve air quality, for wildfire detection, and a host of other innovative use cases. Roger and Kim, talk about what the UTOPIA approach means for communities and what they've got in stock for the future. Now here's Christopher talking with Roger and Kim.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Christopher Mitchell at the Institute for Local Self-Reliance in Saint Paul, Minnesota. And I went ice skating today, and I love it. It is really great in the winter. People are wrong to [inaudible 00:01:40] reeling about winter in Minnesota. Part of the reason I'm just giddy and getting excited is I'm really excited to talk with our guests today, get the low-down on what's been happening in UTOPIA and Utah. So let me bring back to the show Roger Timmerman, the CEO and executive director for the Utah Telecommunications Open Infrastructure Agency, better known as UTOPIA. Welcome back, Roger.

Roger Timmerman: Hi, Chris. It's always great to be on the show. We love being on here. You got a great group you talk to and great topics, and hopefully we contribute to that.

Christopher Mitchell: I think if I go more than a year without talking to you, I'm doing something wrong, because there's a lot of exciting stuff that's happening out there. I'm also going to bring back Kim KcKinley, the chief marketing officer and deputy director for UTOPIA. Welcome back, Kim.

2:27

Kim McKinley: Thanks for having us, Chris. We're excited to talk about all the stuff we've been doing in 2020. Well, now we're in 2021, so a little backstepping.

Christopher Mitchell: Yes. And I'm sure people can't get enough of looking back on that wonderful year that was 2020. So let's spend an hour doing that.

Kim McKinley: Well, re-hashing what happened in 2020 over and over again.

Christopher Mitchell: So I have this great way of starting off. And I have to say I'm actually surprised that neither one of you is out of breath right now because of the amount of work that has been going on in UTOPIA. So let me just ask you, Roger, just give us a brief sense of what has happened in the last calendar year for UTOPIA.

Roger Timmerman: Well, a lot of things. And it's a lot of stuff in parallel. We're not a single city project or a single pipeline of project. We have partnerships with obviously the original members of the project, which were 11 cities, but we've been adding cities. And so well, you say, "Where are we building fiber?" We may have 10 to 20 different projects going on in different cities all at the same time. And really that's the only way we've ever gotten to the type of productivity we're at right now, because we'd have a bottleneck in one city. A lot of times the city itself is the bottleneck and permits and inspections and all that. But we're busy. We're growing way faster than we ever have, but that's really because so much is going on in parallel these days.

Christopher Mitchell: But let me just give people a sense. We'll talk for a second about what UTOPIA is a minute, but in the meantime, what are some of the stats that come to mind over the past year that define 2020 for Utopia?

Roger Timmerman: Yeah, we had some good ones. So on the construction side of things, we're looking at about 1.7 million feet of conduit, which put we put in the ground. And you say, "What does that mean?" You imagine the horizontal directional drills out there and people digging holes. And that's a lot of construction in a lot of neighborhoods. Obviously, we clean that up when we're done, but that is a lot of conduit. That conduit needs some cable in it. Or else, it doesn't do you any good. So 1.4 million feet of fiber cable. Those are all different types. We're talking how many feet of fiber? Well, that cable may have 288 strands in it. It might have 400, 800 even, some of those bigger cables. And sometimes it's the little guys. So lots of cable, 1.4 million feet, and the result that we now can reach a lot more people. So it was about 25,000 new locations that can get service. When we're talking homes... We have business and residential... it's about 20,000, I guess it's 20,500-ish new homes that can now sign up for the service. We did over 10,000 new installations for homes, about 510 new businesses.

5:23

Roger Timmerman: This is a ton. I mean, you just imagine each one of those jobs is multiple crews. You got the placement of the conduit underground. So you've got a missile that pulls that under ground. The digging of the holes, the installation of the fiber cables, the splicing, electronics, the configuration, everything involved, the marketing and sales systems and all that for over 10,000 new customers is huge. And when we look at it historically, it kind of amazes us because it's like well, we've been at this thing for a while is the most you know-

Christopher Mitchell: Closed again in 20 years.

Roger Timmerman: Yeah, it was created in 2002, but we really financed and started moving in 2004. And all the way from 2004 to 2019, we got about a 100,000 addresses covered where they could sign up for services. And to put another 25,000 of that just in this last year, I mean, 25% growth from all previous years was huge. And we're not slowing down.

Christopher Mitchell: No, and one of the things I would note is that you also put a big check mark next to several other communities, and you don't have to worry about the mayor calling you to say, "When are you going to finish this up?" So you have several communities where you're now 100%.

6:42

Roger Timmerman: Yeah, it's nice to finish projects. It's really easy to announce fiber projects. It's really hard to finish them. So we love finishing these cities. And some of them are new projects, so it's not even like hey, we've been at this city for 15 years. We finished West Point and 15 months. We finished Morgan. We finished Woodland Hills last year, or I guess the year before. And those are relatively small cities, but the pace of this construction, we are working through cities at breakneck speed. And yeah, it's busy. And it's the construction. It's the sales. It's the marketing. It's the vibrations. I mean, every person here in our, I'd say company, but we're a public agency, every single person is trying to catch their breath. I mean, it has been a heck of a year. It's been challenging with COVID, but from just a business perspective, demand skyrocketed, and we had some pretty frank conversations with our employees saying, "Look, this is an emergency. This is a critical service for people." You've got people who are trying to function remotely for work and for school and for telemedicine. This is not because someone is getting buffering on Netflix. This has become such a critical service for people, and we're coming in and solving that problem for people, and they see it that way. And that's why we saw skyrocketing sales when COVID hit because it is now that type of a service.

Kim McKinley: Hey, Roger, but I think that what we saw even within our company is people rose up to the challenge, and they worked late, and they were working. I had people who were calling at 7:30 in the morning and is calling at 7:00 PM to get these installs scheduled, and I think our contractors stepped up as well. So we really rose to the demand. I mean, when the pandemic hit in March, we had our biggest month, probably almost doubled in UTOPIA's history. So we went from we're all in the office together to we had to adjust working from home and meet the increased demand during the pandemic, which it was really heartwarming to see how many people who work at team UTOPIA who not only value this as a job, but they really value it as a passion to connect people.

Christopher Mitchell: Yes, and you had service providers. I mean, there's so much that we'll get into in this conversation. So, Kim, let me just ask you what do you remember of 2020? I mean, a lack of sleep will certainly hurt the memory, so I'm curious.

Kim McKinley: Yeah, I didn't get a lot of sleep. I got a lot of stress, a lot more gray hairs. My hairstylist likes it because I come in more often these days. But what I remember is just really watching the community and the increased demand in this. And all the years that we've been doing this project and we've been saying we believe this is essential, we believe that this is infrastructure, that we have a role in this and really seeing the conversations switch. You don't have to try to convince people that this is essential anymore. People are coming to you going, "This is essential." I mean, even listening to podcasts like yours and others, the conversation has totally taken-

210:01

Christopher Mitchell: Others?

Kim McKinley: Yeah, well-

Christopher Mitchell: Others?

Kim McKinley: I mean, there's no others. There's no other podcast. But it is really, like I said before, watching our contractors, watching our ISPs, watching everybody come together and see what 2020 really brought to us, which 2020 wasn't the best year for the books, but for Internet and connectivity, I think a lot of people, especially in Utah, got to see the beauty of it. I actually just got a email from a customer that we connected probably right before the pandemic hit, and he said, "I can't thank you enough for the work that you guys have done to connect my community and my house. Because of that, I can Zoom with my child and my grandkids, who live in Indonesia." And to see those kind of emails is why we do what we do here at UTOPIA.

Christopher Mitchell: Now when you were on a year ago, we were talking about Idaho Falls, and they hit a really exciting milestone of 1,000. It was your first project launching with such a great integration outside of the state of Utah. How has that been?

Kim McKinley: I think it's been a great relationship, and we are seeing tremendous growth up there, and they are continuing to grow at breakneck speeds up there in Idaho. So we have all our UTOPIA growth, plus we're helping them with their network. So it added a little bit of a challenge, but we've never backed down from a challenge here at team UTOPIA, but we're really proud of what they're doing up in Idaho.

Christopher Mitchell: Excellent. I wanted to start with just that enthusiasm and progress, but I want to double back briefly and just note for people who are unfamiliar, UTOPIA is a multi-city project that is the pioneering... Well, I guess pioneering in some sense. It wasn't the first open access network, but it is the largest and the fastest growing and you claim most successful... I think that's accurate... open access project in the nation, which means that you operate infrastructure and you have multiple ISPs that are competing across it. It's certainly long bent the most competitive space in the entire country where you have so many different choices of service. Roger, that was the quick version. Did I leave anything out that you think is important to a definition of what you think UTOPIA is?

12:23

Roger Timmerman: We do also financing, so when we do these city partnerships, instead of just the city doing a bond and taking on those obligations, it's a little different because the phase 2 entity is the Utah Infrastructure Agency, and it finances these things. So it takes on the debt. It builds network. It pays for it over time with customer connections. And from a city perspective, really there's just a partnership contracts, but there's no issuance of public debt from their perspective. We do it under the UIA organization. And there's been some partnerships where the city says, "Well, I want to. I want to own this asset and take on those." And they have to plan for future capital expenses and things like that, but that's an option. And as you mentioned, there is this Idaho Falls partnership out there. They own that network. It theirs. But we are their operator, so we design it. We configure it. We monitor it. We dispatch. We do everything we can remotely, and then they do the local stuff, and it's a pretty cool model, and we've gotten a lot of cities asking about that as an option. And from our perspective, it's like well, I know Idaho Falls is pretty close geographically to here, but I mean, they might as well be in Florida or somewhere. It's an island as far as we're concerned. It's not correctly connected to us here in Utah.

Roger Timmerman: So we manage it remotely, but we're able to provide a lot of help so that that system is able to avoid really all of the start up costs and risks and technology problems and ramp up. I mean, we just kind of go in there and say, "Well, we'll charge you when you get that first customer, and we'll charge you are share of that first customer." And a lot of these systems, it's a huge problem for them to build a facility and hire the people and get everything up and running. And they'll go years and years before they ever cover their operating expenses, but Idaho Falls was able to completely avoid all of that because they're just picking back up what we're already doing.

Christopher Mitchell: I just wanted to note that it is close by Western standards on the East Coast. It's probably like 200 miles, and it's multiple states, and people think of that as an unimaginable distance.

Roger Timmerman: Yeah, that's true.

Christopher Mitchell: So I want to ask about the staff. And I guess, Kim, let me ask you first, what are the implications of this rapid growth? Were you able to do it by just working people to death? Or did you have to figure out how to add capacity?

15:05

Kim McKinley: A little bit of both. Some people don't want to live 24/7 of UTOPIA Fiber, like Roger and I tend to do, but we added 20 new people this year. But that looks bigger than it actually was because we added our own locator team, which we used to outsource that. And then we brought that in-house at the beginning of 2020. So we did scale in different positions. We have a new smart city initiative as we deploy more smart city applications throughout our network. So we've really been scalable, and I don't think for the size of network that we have that we really added that many employees, but we did add a few.

Christopher Mitchell: And when you say a smart city, we've talked before I believe about the PurpleAir sensors, that you were among the first that I was ever aware of that was monitoring that local air pollution. You have the detectors to look at the fire spots. Are there other things that you're doing as well?

Roger Timmerman: A lot of the cities don't have the resources to do these types of things in their own cities, especially the smaller cities. So initially we said, "Let's maybe see if we can make this as a product that we sell to these cities." And some of them, we just said, "It's such a negligible cost. We just need people who know what they're doing, and we already have those people." So the PurpleAir one, we just took the initiative and said, "This is just automatic. Every single one of our cabinets and fiber huts is going to have PurpleAir sensor installed at them." And then we can work with cities if they want to increase coverage beyond that to add additional sites. And that's become a huge benefit. I mean, air quality in Utah, it's one of the most important topics, I mean, before COVID, was probably the number one political topic because it's bad here. And it's not necessarily because we pollute so much. It's kind of the geography. We have this bowl that we're in with mountains on all sides, and it traps the air. And so even a reasonable amount of pollution just sits here, and we just breathe it. And it's pretty bad.

Roger Timmerman: And so having a really, really good system of sensors is really a huge value to these communities. It's not just like hey, Utah is a green air day or a red air day. It's neighborhood by neighborhood, right?

Christopher Mitchell: Right.

17:21

Roger Timmerman: The schools are looking at are sensors in deciding whether it's going to be an indoor or an outdoor day based on that sensor that may be at the school or at the cabinet that's on their property that's our easement. It's very, very localized. And we've learned a lot about pollution as a result. We can see on the readings the impact of being near a freeway. It is actually a measurable difference of being near a freeway and further away. It's a measurable difference being near a canyon. The canyon winds blow in and out bad air, and it's a measurable difference at elevations. We have this inversion, and it sits at different elevations, and it's somewhat temperature dependent and somewhat wind dependent. And these things that we really didn't understand before come to light as we have better data. And so it's really been a cool tool to put these things everywhere we can. And now we're the number one provider of the sensors in Utah just because we've been putting them out every chance we can.

Christopher Mitchell: I think that air quality is fascinating. I mean, we could do an entire show, and I probably should. I mean, the implications for education are staggering, the way it affects particularly developing brains. Incredibly important. But let me just rush you along to any other smart city topics to make sure we have time to cover them all.

Roger Timmerman: The wildfire detection system is a really popular one. Obviously, wildfires were a big deal and also affects air quality. Actually, having these really high-end thermal cameras that are 24/7 scanning over high risk areas and bench areas... I used to call it urban interface, where homes and properties are at risk. We're not covering national forest lands, but we can save the firefighters and first responders some time, which is a really big deal. Just a few minutes of advanced notice can save structures and lives. And so that's a really popular one. We're installing more of those cameras. Our goal is to cover the entire Wasatch Front and Wasatch Back, which I don't know if you're familiar with Utah. There's a couple hundred miles of bench area, and that takes quite a few cameras. We cover 30 or 40 miles with the camera, depending on the geography.

Christopher Mitchell: I feel like I'm also trying to rush you along, while I also just want to interject to add on because this is so important. We're also seeing there might be massive fires in Montana or Washington in which Utah's committing staff. And so the ability to monitor and respond more quickly is essential to the West being able to survive this change in climate. So again, these things are really important. And I think it's really great that you all see your mission is not just providing broadband, but really using that technology in innovative ways.

20:07

Roger Timmerman: We kind of go into cities and brainstorm with them a little bit. We're like, "What do your SCADA systems look like?" and "What do your irrigation systems look like?" A lot of those are kind of commercial products that they can buy and implement. So really it's just buy the thing, put it in place, and then plug it in. But a lot of cities just kind of leave this stuff alone. And we're a desert here, and we don't act like it a lot of times, and so we do have water shortages, and that's another high priority. So as we can smarten up our irrigation systems and water management, that's another big benefit. We're also in the process of deploying kind of a beta version of a LoRaWAN network across our cities. And a LoRaWAN, if you're not familiar with LoRaWAN, it's kind of a lower frequency... It's a 900 Mhz signal that goes up to about 10 miles of coverage, and it's incredibly low bandwidth and low battery usage and power usage for the client devices.

Roger Timmerman: But that allows us to bring in a bunch of other smart city applications, all that use that same network, and that would be things like smart parking. Put these little LoRaWAN-enabled parking sensors. We can put in a LoRaWAN-enabled street lighting so they can actually program streetlights to turn on and off. They can actually damage the lights during certain hours rather than it just be on and off. And as you do the math on how many light and how much power usage out there, those abilities can save a significant amount of power and cost to our cities. But, I mean, there's a whole list of really cool LoRaWAN-enabled technologies out there. And that's kind of just another overlay. The fiber connectivity enables doesn't compete with wireless. It enables wireless at all different frequencies and technologies, and a LoRaWAN smart city network is just another overlay that we want to put out there. Then we have Wi-Fi 6 hotspots that we're trying to get out there to our city facilities, kind of act as just a convenience when you're at those facilities, but also a lifeline for some of these communities if for whatever reason someone has been shut off or they haven't paid their bill or they're disadvantaged economically or something, find themselves in a situation where their broadband either isn't working or that they can't afford it or been shut off, they can go to any of the public facilities.

22:31

Roger Timmerman: Maybe they're coming from non-UTOPIA cities to UTOPIA cities where they can get this. But even non-UTOPIA cities are doing this with us. We have lots of these other cities in Utah that say, "Well, we're not quite there with fiber to the home, but we want UTOPIA to come in and interconnect all of our city facilities and put public Wi-Fi out there. We're a 15-ish city fiber to the home project, but were a 50+ city fiber network," just that those haven't gone so far as being all the way to the homes.

Christopher Mitchell: So, Kim, I get the sense you've heard that spiel once or twice. Roger is very, very enthusiastic about these devices.

Kim McKinley: I have heard that spiel that I might be able to recite it word for word. We go and talk to so many cities throughout the state, and Roger, I don't think, has ever been less enthusiastic about that from the first time he said it to the hundredth time he said it. Roger has more enthusiasm about fiber and smart city stuff than anybody in this industry. I challenge anybody in the industry to tell me that Roger is not more enthusiastic about it.

Roger Timmerman: Well, it's just the fun stuff. I mean, if you're just looking at a cable in the ground, it's not doing anything. It's what you do with the fiber connectivity. So in the past, we say, "Well, it's super fast Internet," which is cool, but when it's super fast Internet plus this whole myriad of smart city applications and cool new developing technologies in wireless and everything else that's out there that all comes back to this fiber backbone, that gets really excited. And Kim's totally sick of me going into all of that, but that's just the way we do.

Christopher Mitchell: You think that's exciting, but for some people, it's exciting as financial targets. And that's what I want to really talk about, which I think is just exciting to note. I mean, I'm so tired. We're seeing another wave of attacks across the country against municipal networks. I was just going back and forth with this guy in Canada who's using these garbage studies. And so when I saw this in some of your materials about 2020, I thought it was well worth making sure we hit on it. So Morgan City hit it's revenue mark ahead of schedule by one year, Payson City 11 months ahead of schedule. West Point City is very close to hitting its revenue mark, which would put it ahead of schedule. And then Layton City also a year ahead of its schedule. So I mean, I think this year of lots of new people signing up has really helped to reinvigorate the business plans.

25:09

Kim McKinley: Absolutely.

Roger Timmerman: Yeah, and the city sees success nearby, they say, "Well, we want to do that too." And so every one of these examples where we hit those targets really gives comfort to other cities. And we model these things out kind of at a breakeven scenario where they may have as much as four or five years to actually get to a target take rate. And when we go in there and hit it in a year, that's really exciting. And those cities can breathe easy and say, "Great. This is awesome. We get this city network built and paid for, and we don't have to pay a dollar for it." And that's a beautiful thing. And it's a lot easier these days to go and get it at 35% to 40% take rate in the city. And it still takes a lot of work, but I'd say it's easier than it used to be. And Kim has really stepped up the game on the marketing with UTOPIA directly and through our service providers. I don't know if you want to talk about how things have changed from the market perspective, Kim.

Kim McKinley: We have gone out with heavy PR efforts and marketing efforts, I mean, because we have had, I mean, Chris, as you mentioned, when this project started, it wasn't all roses and what it is today. And so we had to change the reputation. And we do a lot of big marketing. And the way I always say that we've done marketing different in the open access forum than anybody else is because we lead with the UTOPIA Fiber brand and we say, "What flavor of UTOPIA Fiber would you like from an ISP perspective?" So we have a direct relationship with the customer. They sign up with us. And then we kind of have their selection of service providers. So we really control the experience to make sure the customer is getting the best experience possible. So we're a little bit disruptive in this industry. I'm sure you've heard of that before, Chris, that we don't follow norms, and if it's working like it is, we don't plan on changing anything. But we are always being agile and watching the market and watching financials and watching technology, and we want to stay agile and stay ahead of everything else, if all possible. Would you agree with that, Roger?

27:25

Roger Timmerman: Yep. And just as an example, on one of those projects with the financial target, when we did this thing for Morgan, we said, "Hey, we're going to build this thing. We need to go get something like a 33% to 35% take rate." And we're at 53% right now. We're still ahead of when that obligation will start. We got all this buffer. We still got all sorts of buffer in time, and yet we cleared way past that. And it's still growing. We don't seem to ever hit a ceiling of take rate in these cities. They're all going up.

Christopher Mitchell: That's one of the things that I wanted to bring up because I feel like the two of you are really good people to talk about this with for a second. I was reading a report from Wall Street analyst, was talking about fiber to the home projects from the big carriers. And it just took for granted that the take rate hits 40%, and then it levels off, and you're stuck there. And I was just thinking that's not what I see in the municipal market. In some cases, yeah, you're like oh, we're stuck in now 2% yearly growth, but over five years you're getting 10% more of the market. And that's what I'm hearing from you too. I mean, 53% over what timeframe? That's remarkable if it's less than eight years.

Kim McKinley: We launched Morgan in January of 2020. It was our first customer. So we are at 50% within one year, 53%.

Christopher Mitchell: Yeah, that's just... I mean, I feel like five years ago I would not have predicted this. Five years ago, I would've predicted that... So if we're sitting there in 2015 in an in-person conference where we used to see each other, then I would've said in 2021, it will be harder to go from zero to 53% in a short period of time. But it seems like when you're offering advanced infrastructure, that people are noticing, is my only takeaway on it I guess.

Kim McKinley: I think they're noticing it, but I think that people are sick of the incumbents. I think that you have to value your customer. People will give me credit all the day and say, "Well, look at what you've done for this network." Well, no, it's about going back to the basics of respecting your customer, appreciating their money, giving them the best service. It's not rocket science. It's just going back to the basics of how people want to be treated.

Roger Timmerman: And we say it's so much easier and there's so much demand. I mean, that's part of it, but I mean, I would caution any project out there make a real effort in a budget for your marketing efforts in this. It's not just if you build it, they will come mentality. You've got to be aggressive with that because people won't even know about you.

30:08

Christopher Mitchell: That's what I was thinking.

Roger Timmerman: It doesn't matter how much they hate their broadband provider if they don't know who you are. And I mean, any municipal network or public effort out there is an unknown entity. And we were going to all these meetings in Woodland Hills, for example, and bugging people and marketing and all this stuff, and I still run across people just on social media way to personally. I'd say, "Hey, have you signed up for UTOPIA?" And they're like, "What are you talking about? We have UTOPIA in our city?" And I'm like how did they slipped through the cracks? All this effort. So I mean, really that extended effort is a big deal. You've got to get out in front of everybody in these communities one way or the other.

Kim McKinley: And then I get the call, like why hasn't this person heard about UTOPIA, Kim? You're not doing your job well." But I think it's a multifaceted approach. It's not that you're going to get it from digital ads. It's not you're going to get it from social or referral or grassroots. It's all of them. And I think that goes into some of the stats we saw in 2020, which we almost had 500 new five-star reviews on Google. It's you can't just depend on one aspect. I hear at broadband conferences, yet again, Chris, when we used to go to those that people would say, "Well, we put it in the city newsletter." And I'm thinking city newsletter? That's not marketing. You have to compete where others are competing. And so we do things on Pandora. We do things on YouTube. We do things on Hulu. We're competing in a broader sense, and you have to get creative. I've been to more city parks in my life in the past five years than I ever did in the 35 prior to that. But you have to be aggressive and stay hungry to continue to get these customers as well. So I would agree with Roger.

Roger Timmerman: Yeah, and we don't take an approach of like if most of the people out there are happy with this, then we're doing well.I mean, I think that's the approach of a lot of the incumbents. We go in there, and every single complaint... It could be a comment on a newspaper article. It could be a social media post. It could be anything where you can find a post or a comment that's negative, it's how do we solve that? Can we get a hold of this person and solve these problems? Because if you can take someone who had a bad experience or doesn't like you and convert them into a supporter and a happy customer, that results in more customers. They have friends and neighborhoods, and more now than ever in our history, people are connected online. They jump on Facebook, "Hey, I'm paying too much for my cable, and I hate them, and they jacked my price up again. What can I do? What are other options?" And we just see them get flooded with comments that are pro-UTOPIA, and we love it. And then every once in a while somebody says, "Ah, they stepped on a flower in my front yard," or something. And we're like, "Okay, we need to get someone out there to plan a new flower." We pay a lot of the tinted to that stuff.

32:53

Kim McKinley: So when I look at Google and I say, "Why did we get a three-star review?" and my team is, "We're already calling them, Kim. We're already looking into it. They know that I'm checking it, and they're checking it too because I think that goes back to the great staff, is that they care about the customer and that they put the customer first. And I'm over customer service as well, and when somebody calls in with a router issue and they're struggling, I said, "Yeah, you've heard this complaint 15 times today, but this is the first time that person's calling. And you should treat them like that's the first time. This is the issue that they're having. So treat them with respect and do active listening. Actually listen to them," because I don't believe in scripts, this whole big script. Have a conversation like a normal person. Let's talk human to human. And I think it's really worked. I mean, one of my customer service reps has gotten brownies and flowers, and I'm like who sends brownies to a customer service reps? But I mean, that's where I think the market has been so dying for this kind of service that we're providing and really listening to our customers.

Christopher Mitchell: Roger, you look like you want to jump in again too.

Roger Timmerman: That approach to our customers, I mean, our customers are our owners. And that's a different attitude than I think a lot of the private providers out there have. Their attitude is how do we make money off each and every one of these customers? And if there's a thing that we have to do where we'd lose money, then let's not do that. And yet, we make it up in numbers. If we have more customers and more satisfied people, we may lose money here and there solving some of these problems. But they are the owners of our entity, our agency. We're a public entity, and we treat them that way. And so I think municipalities are in a great position to jump into this space because they have that... Well, I would say many have that attitude. Some people might say, "Ah, my city is awful to deal with." But not all cities are that way. I think many cities strive to serve their community and are responsive and see it as a service more than just a job and a way to pay the bills. And so we treat it that way, and that's a big difference. And I think our customers appreciate that relationship, whether or not they understand it.

35:13

Christopher Mitchell: And I think we'd all agree that cities would be well suited to examine their options and deal with any deficiencies along the way before they consider going into this business because this is one that's hard, and you've got to do your homework before you enter it. I want to highlight one other thing, which is as, Kim, you noted, and I really didn't want to harp on this because every other time we've talked to you I feel like we have talked about the history of the attacks that UTOPIA has suffered in the financial challenges in the early years, but it is truly remarkable that for the majority of UTOPIA's history now, a strong majority of it, you have not used any taxpayer dollars, although that is what you are consistently attacked for. And I would like to note that I actually do not think it is the end of the world to build public infrastructure with taxpayer dollars. But I do respect those who, if it is intended to not use taxpayer dollars, and ideally it should, but since 2009 you have not used taxpayer dollars. You've used private financing to build the network. So Roger, do you just want to quickly give us a quick rundown on how things have gone for the past 11 years?

Roger Timmerman: Yeah, so you're right. We get attacked all the time over that initial history. And I make the argument with cities all the time and say, "Even if these projects cost to you the entire 100% of the cost of the project of building, your community is still way better off." And people criticize Provo, for example. They say, "Ah, you've spent $40 million, and you gave it to Google for a buck." They get beat up all the time, and I say well, at the end of the day, I still have my opinion that the city would've been better off to keep it themselves and continue to have an open access network there. But at the end of the day, they still had an enormous benefit as a result of that public infrastructure. And people can say, "Well, Provo, they really messed up with this thing, but at the end of the day, I have really cruddy broadband at my house, and I would consider living in Provo because they do have good broadband." You say, "Well, isn't that a benefit?" It's a net positive for the community, even if the entire full cost of these projects falls on the backs of the city or the taxpayers.

37:21

Roger Timmerman: Now, if part of that can be paid with voluntary subscription fees and use of the system, then fantastic. You're even better off. And if 100% of it can be paid for by voluntary subscriptions, then you've really knocked it out of the park. So I go back and look at that first phase of UTOPIA and say well, yeah, some of the cost of this infrastructure had to be paid for by those cities. But those cities benefited from better service, and they were still better off than they were without the very worst of UTOPIA. Since that time, to your point, the majority of the time of UTOPIA, it's all been fully paid for by the subscription fees from voluntary subscriptions. And that's been enormously successful. So it's like if we ignore that first phase of the project, we're 10 for 10. This is perfect. It's no cost to taxpayers. The whole thing's paying for itself, the most successful fiber project we could point to.

Roger Timmerman: But we do have that history that we're still trying to overcome. And we're making really good financial progress while were doing all of this. Obviously, as we grow and add customers, it puts us in a stronger position to pay more and more of previous debts and obligations. And we are actually making good progress there, but as far as when we're going to be able to take the phase 2 and pays all of the phase 1 costs, it's still going to be a while.

Christopher Mitchell: Sure. At the same time, it is worth noting, I mean, I feel like and my rudimentary knowledge of this business, going from 25,000 subs to 35,000 and pressing rapidly beyond that, you're really hitting that. A lot of that's gravy at this point. You're no longer struggling to afford to have the right number of workers to answer the phones and things like that. You are really in a strong position for growth at that point is my impression.

Roger Timmerman: Yeah, I mean, from a money perspective, our revenue, month-over-month growth, is about $50,000 to $60,000 a month. I mean, every month that is the growth. And we used to celebrate record of months of 10,000 a month, which was great that we were even growing at all. And obviously that type of growth of $50,000 to $60,000 a month, month over month, adds up over time. That puts us in a $700,000 to $800,000 a month better position after just a year, year-over-year. And so that obviously becomes funds that we use to pay off bonds. We can grow our operations a little bit conservatively. I'm a tightwad, so we're pretty strict about that.

Christopher Mitchell: Big nod, big agreement from Kim [crosstalk 00:39:56].

40:00

Kim McKinley: I barely get a trashcan around here. He's like, "Do we have enough money?"

Christopher Mitchell: Kim's really disappointed she hasn't been able to take her Maserati out lately.

Kim McKinley: Yeah, exactly. In my Pinto driving around.

Roger Timmerman: Yeah, but the nice thing is we don't have investors that we're having to pay. We don't have shareholders. Our motivations are to reinvest that money back into the system, and we've been able to do a lot of growth that we wouldn't have otherwise been able to do. We've been able to provide a lot of connections that maybe in the past we would've said, "Hey, that's cool over there is just going to be too expensive to build to or that government facility," or whatever. Right now it's basically blanket. If it's any of our member cities, we will just pay for the construction cost to get there no matter what because this is a utility, and everybody needs to get that. And over the numbers of things, we make that back and aggregate. And that financial growth has really made things a lot better around here and allows for all of those benefits of paying off debt, do the things we need to do, provide more public benefits. We're very interested in future programs of digital equity and resolving that, having programs for lower income households, otherwise underprivileged households and communities. And so we hope to have continued success. We also hope that the state and counties and cities have programs that we can leverage to do that.

Roger Timmerman: And we do a really good job of not cherry picking neighborhoods. So the service availability is not a digital equity problem in our cities. Anywhere in any of these cities can get 10 gig if they want, or a gig, or 250, but the price of that service, we're looking to do some programs to help with that, and we've not yet been able to do that.

Christopher Mitchell: Right. That takes some time to build up to. So we're running out of time. I wanted to give Kim one last chance to talk about the future, which is I assume that we should keep our eyes peeled and that there will be more announcements there are more cities in the work that you are secretly driving your Pinto to backroom meetings to talk about what can happen?

42:19

Kim McKinley: Absolutely. We have a lot. I was actually just talking about the press releases that we have coming up in the next couple of months earlier today. But we have a lot of news. We believe that 2021 is going to be another record-breaking year. There is a joke here at team UTOPIA that Kim's motto is, "Good is not good enough. Do it better." And we hit 10,200 residential sales this year, and I'm already like can we hit 13,000 that year? And we're always striving to make this better, but we have a lot of fun announcements, fun programs that are coming out, and we can't wait for 2021. I thought that after 2020 I might get some sleep, but after talking to Roger, it doesn't look like that's going to happen. So we're just going to keep on trucking. And we really want to see this industry not just change in Utah, but see this initiative grow throughout the country and see more open access networks flourish. You're starting to see seeds of it throughout the country, but we're sitting here and watching, and if anybody ever needs any assistance or feedback, we're willing to talk to anybody because we understand the pitfalls of what these networks can have, because I always like to say if a network had made a wrong decision, we've probably done it first, and we might have even done it twice.

Kim McKinley: So we have a lot of good advice to give to any communities out there. But we're excited. Good team here. And we're just working away.

Christopher Mitchell: Excellent. Roger, last comment?

Roger Timmerman: Yeah, I would just put an invitation out there. If you're a community considering this, do it. Seriously, get involved and get your elected officials involved. Feel free to reach out to us. We can help. We're not a company. We're not selling you anything. We're a public entity, but we want to help and see other communities be successful. And there is no better time. The demand has skyrocketed. People are working and educating remotely, and interest rates are incredibly low. And so as we go out for tax-exempt bonds, it's amazing what the cost of money is and how that works for funding these municipal fiber projects. So please feel free to reach out. Don't sit on this thing. I mean, people need this type of connectivity now, or they're at enormous disadvantage. We need this in our communities. So again, please reach out and get involved and make it happen in your communities.

Kim McKinley: And reach out to me because Roger is out skiing or doing whatever he-

Christopher Mitchell: Roger's going to talk about smart apps and smart city stuff the whole time. It will be a sales pitch for smart city apps.

45:00

Roger Timmerman: Hey, there's a place for all that.

Christopher Mitchell: We really to thank both of you for your time. And I think it's just terrific. These infrastructure projects are really challenging, and it's unfair the kind of arrows that you all have endured, but I'm excited what you've done for the communities out there and the inspiration you are for others as we move forward. I'm very excited to see what happens the rest of this year. So good luck.

Kim McKinley: Thanks so much, Chris.

Roger Timmerman: Thank you. Always a pleasure, Chris.

Ry Marcattilio-McCracken: That was Christopher talking with Roger Timmerman and Kim McKinley. 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's @communitynets. Follow muninetworks.org stories on Twitter. The handle's @muninetworks. Subscribe to this and other podcasts ILSR, including Building Local Power, Local Energy Rules, and the Composting for Community podcast. You can access them anywhere you get your podcasts. You can catch the latest important research from all of our initiatives if you subscribe to our monthly newsletter at ilsr.org. While you're there, please take a moment to donate. Your support in any amount keeps us going. Thank you to Arne Huseby for this song, Warm Duck Shuffle, licensed through Creative Commons. This was episode 445 of the Community Broadband Bits podcast. Thanks for listening.

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