This is the transcript for Episode 457 of the Community Broadband Bits Podcast. We're joined by two representatives from Conway Corp, a municipal utility in Conway, Arkansas to hear about their commitment to providing high quality Internet access to residents over the last four decades. Listen to the podcast here or read the transcript below.
Bret Carroll: Thank you Christopher. Glad to be here.
Christopher Mitchell: We also have Jason Hansen, who is the chief technology officer. Welcome.
Jason Hansen: Thank you, Chris. Glad to be here.
Christopher Mitchell: Bret, let me start off with you, because I always like for people to get a sense. Where in Arkansas is Conway and what is it like?
Bret Carroll: Conway, it's in Central Arkansas, about 30 miles northwest of Little Rock, which is our capital city. We're a population of about 67,000. Our nickname is the City of colleges, which is kind of unique for a City of 67,000. We have three institutions of higher learning, University of Central Arkansas, Hendrix College and then Central Baptist College. And Jason and I both are people that came here in our college years, went to college here, fell in love with the community we've been here ever since. So I've lived longer, I grew up in Little Rock and Jason has spent a lot of time in Mountain Home. And I've now lived in Conway longer than I've lived anywhere else. But we're a public power company. We have a very diverse economy in our community with manufacturing, technology and the like. And in 1929, our city leaders decided that they needed a municipal utility and they did it in a pretty innovative way, connected to education. And I think that innovative spirit has really guided us ever since.
Christopher Mitchell: Jason, how long have you been in Conway?
Jason Hansen: Oh boy. I guess I came to college here in '93 and have been here ever since. So I guess close to 28 years, maybe, something like that. So just like Bret, I've lived here longer than I have lived anywhere else and call Conway home.
Christopher Mitchell: It's funny. I never really thought of it that way, but I'm in the same boat. Here I am in St. Paul, Minnesota, I've lived here longer than any place else myself, but came here because of college. So it's a good reason to have some colleges around.
Bret Carroll: Yes it is.
Christopher Mitchell: So let's talk about, so you've been doing public power for 90 years then if my math is correct, a little more than that.
Bret Carroll: 90 plus, a little better than 90.
Christopher Mitchell: So how did you first get involved with telecommunications then?
Bret Carroll: So that came a bit later. Here we are, 30 miles northwest of Little Rock, I think that our broadcast signal was not great, the cable situation was not great. And Jim Brewer, our CEO back in 1979, he was our CEO for about 26 years. And in 1979, I think he realized that there was a need here in our community for a cable system and didn't really have anybody that was interested in serving us. And so he had the foresight with a lot of other things that he did, to acquire the exclusive cable franchise agreement for the City of Conway, Arkansas. And again, I think that ties back to that innovative spirit. Really, in that time in 1979, Mr. Brewer, if you think about it, he was probably one of the most powerful people in the city because the mayor's job was a part-time position.
Bret Carroll: One of an employee who was on Mr. Brewer's leadership team was also over the planning commission. So we had a lot of momentum and a lot of leadership and a lot of ideas that really have served Conway well. But he realized that here we are, had colleges here and had a pretty mediocre and poor cable system. And he decided he wanted to do something about that. So 1979, we acquired the exclusive franchise agreement to serve the City of Conway. And in 1981, some customers received our first cable transmission. So that's when it really all first began. And at that time we had a 55 megahertz cable plant. That's right, no fiber, no fiber at that time.
Bret Carroll: And in 1995, it was decided that our cable plant needed be rebuilt. So we did a big rebuild at that time. And with really DOCSIS on the planning horizon, the decision was made to deploy an HFC plant. So that's what they did, utilizing at that time, a 500-home node and a 750 megahertz plant with the rebuild. A couple other of our leaders, Bill Hegeman, and Richie Arnold, former CEOs who have retired, still live in our community. We still bump into them a good bit, really kind of had the vision for what an Internet, a broadband system could do for our community. And so that was really where that vision came from, that Conway was always, hopefully a little bit progressive in our thinking and having colleges here help drive some of that, I think. So that's really when that all began to happen. In April of 1997, Christopher, if you can believe it, we became the third city in the country to offer something other than dial-up, a broadband or a high speed Internet system.
Bret Carroll: And we did it with proprietary Zenith cable modems. And I'll tell you what, our early adopters of that system really loved the speeds that they got. It was tougher to regulate it then. It was tougher to implement quality of services. And so it was all you could eat, and they did. And some of those early adopters loved it. But 1997 is when all that happened.
Christopher Mitchell: Were you here for that or is that-
Bret Carroll: I wish I could lay some claim to that, but no, I came in 1998. So I got to experience some of the struggles once we launched it, in terms of dealing with customers. I was the CFO at that time. So I came here in 1998 as the CFO. And so I got to figure out how to try to pay for some of this stuff and work out arrangements with the electric department to pay off loans and things of that nature. But no, it was a great time to be in the early stages of that launch. So I got to witness it and see it firsthand. But I certainly didn't have the vision behind it. I'll put it that way.
Christopher Mitchell: Did you know Billy Ray from Glasgow at that time? Does that name ring a bell at all?
Bret Carroll: Billy Ray, I do not. No.
Christopher Mitchell: Okay. He was one of the early ones and his guys were playing around with this in '94, I think. And so that sense of you being the third one to do the mass launch, that was a really special time, a lot of innovation, a lot of excitement.
Bret Carroll: Yeah. Yeah. It really was. And I think it's benefited our community in ways, far beyond we ever imagined.
Christopher Mitchell: That's wonderful. So what's the more recent story? You still have that, is that still the base of the services that people in the community have then, that rebuild from '97?
Jason Hansen: Yeah. So we rebuilt in '95, that 750 plant. But we really have been on a path roughly about every 15 years to do some sort of rebuild along the way. And so in 2010, we upgraded the plant again to a one gigahertz HFC plant, which really opened the opportunity for us to offer even faster speeds a few years later. So we continue to make those improvements to the system as we've gone. And really, the core of the system today is that rebuild from 2010, which was the one gigahertz nodes, but much smaller node systems and significantly more speed. We offer gigabit services throughout our entire community. Anywhere we serve, you can get gigabit services from us, all across the HFC plant.
Christopher Mitchell: And how did that do then during the pandemic came out of nowhere, all of a sudden? I'm going to guess you had a spike in requests for installs. That's what we saw just about everywhere else. But how did you respond to the pandemic?
Jason Hansen: The network really performed incredibly well. I really was pleased with how it performed. We did see increases in upstream and downstream traffic, pretty significant in some cases early on, upwards of almost 30% in the upstream and about 25% in the downstream. And so it certainly was there. But again, we've spent so much time upgrading and pouring the technology back into the plant. As a municipal operator, we don't have shareholders. So our shareholders are our customers. So our goal has been to always provide the best quality of service in that. And so we're reinvesting continually back into the network to make sure we can provide the best quality service. But the pandemic really didn't cause any major issues that we saw. We certainly saw congestion, we saw the increase in installs.
Jason Hansen: We had to work through, how do we continue to serve our customers when we couldn't go in customer's homes? And customer service stepped up big time in those areas as well. But in retrospect really, nothing that was a super surprise for us that stood out. I think if we hadn't done some of the work that we had done, I knew of several other operators that struggled during the pandemic, just trying to figure out how to deal with the traffic that was being generated on their networks. And they struggled through that process. But for the most part, like I said, we really didn't have any issues. And part of that I think really is we've always tried to stay about three years ahead of where we need to be. Now, we certainly didn't plan for a pandemic and say, "We think there's going to be a pandemic in 2020." But those were pieces that were there.
Jason Hansen: And really, the piece that guided that was we'd already begun upstream enhancements to our system, we'd leveraged DOCSIS 3.1 the prior year across our entire footprint. And so those technologies and those pieces that we had already started really played a part as people were transitioning early on. I do think one thing that really came from the pandemic though was, certainly speed was important. We saw a lot of upgrades take place during the pandemic to go from higher tiers of service, which we kind of expected. But the bigger expectation I think, was the reliability and the always on availability. That's what our customers have come to expect. And really, to me, that's what drives our customer experience and the customer relationship that we have. And we've been monitoring our Internet reliability for years. And on average, we're at 99.9% all the time, Internet's available to the customers whenever they need to use.
Christopher Mitchell: And when you're competing, mostly against DSL I'm going to guess, that's a big deal because from what I've seen of DSL plants in non-major urban areas. What I'm trying to say is perhaps AT&T hasn't been as robust with their upgrades in those areas or whoever the telephone provider is, as we might see in Little Rock, for instance. So that reliability probably is quite a differentiator.
Jason Hansen: Yes, it is. But I would say AT&T has certainly done their fair share of upgrades in our community. And certainly, they've got DSL here and they have provided service in specific parts of the city that they want to target to go after. But again, I think the differentiator between us and them, outside of the reliability component of that, in pieces, has really been the local customer experience and the relationship that we have locally with those customers. We've got customers that leave us and think that they can get a better deal somewhere else, or a better experience, and maybe they'll save a few dollars for a short period of time, but typically we get those customers back and it's really driven through that customer experience that drives that.
Bret Carroll: And I would say one other thing there. I agree with everything Jason said. But you see a lot of our competition, they all have some sort of gift card deal or "We'll give you so much money to switch." We don't employ those kind of real discounts. Here's what it costs, here's our value proposition. And Jason's exactly right. We try to wake up everyday thinking about how we can take care of those customers. And it does help us that we are somewhat limited, certainly when it comes to electric, water and sewer in terms of where we serve. But telecommunications too, we serve the city limits of Conway. We do have a little bit of latitude to do more than that. We may talk about that a little later. But we're pretty densely located.
Bret Carroll: The customers that we serve are people we bump into all over town, so we want them to have a good experience. We don't have any turnover in our call center. We pay them well, we reward them well. And so that really provides that great customer experience. And it matters to people. It matters to people, especially when you have maybe some of our more senior customers who want Wi-Fi for their grandkids coming in, and they know someone like us is going to come take care of that for them if they have issues for it. So Jason's right. Obviously, the speed, the reliability, the price is something that our customers have come to expect from us, but that customer service aspect as well is something that we do not ever take lightly.
Christopher Mitchell: That's something that I've talked about with some folks, and earlier, I was on the other end of the microphone doing an interview. And that was when they asked me about municipal broadband systems, that's one of the things I was saying was that in particular, especially communities that have a higher rate of elderly populations, the ability to get that extra customized customer support, that can be really helpful. I've heard from folks where they'll say, like someone gets a new phone, they'll go to the store and get it. And they won't even ask them for help. They'll take it to the utility and those folks will just spend 10 or 15 minutes helping make sure they got everything set up right.
Bret Carroll: I haven't heard any stories about that, but I'd be willing to bet that there's some to tell, if I just knew about them.
Jason Hansen: Absolutely. We've heard about some of those over the years from our customer service teams. Someone just trying to get their email set up on their phone or something like that. Right? We're going to walk them through, if we're serving them in any form or fashion, from a service perspective, on any of the services that we have and that customer needs help, all of our folks go the extra mile when it comes to making sure that that customer is taken care of, for sure.
Christopher Mitchell: Bret, as the former CFO then, we can ask you about all the numbers. How is everything set up? How does it work? You're owned by the city, you have got a municipal electric utility. And then how is your division related to all that?
Bret Carroll: There's a number of varieties of public power companies. The most common setup or organization is to be a part of city government. The electric department manager reports to the mayor or the city manager, whatever the case may be. We're not set up that way. We are a component unit of the City of Conway. We have a franchise and lease agreement with them for all of our services, electric, water, waste water, and then telecommunications, and security as well.
Bret Carroll: And so we have a seven board member, our seven directors, that we report to, so we have an independent board. And so the board is elected, they're ratified by the city council. And so really for all practical purposes, the city council is our regulatory authority. But in terms of day-to-day operations, board meetings, there's a little bit of a healthy separation between us and the city because the decisions that we have to make are not in four-year terms that tend to run in the political cycle. We have to plan five years, 10 years down the road with all those things. And so it just gives us a lot of autonomy to run the utility in a manner that makes sense and a lot of best practices that really removes the politics from all of that. Does that make sense to you?
Christopher Mitchell: It does. Is that a popular election then, that your directors stand for?
Bret Carroll: No. No, the way that works is we have a seven-year cycle. So when the director who was chairperson, when they roll off a new director comes in to replace them. So we have staggered seven year terms. And so we take nominations from the community. You have to live in the City of Conway. It's a non-paid position. So you live in the City of Conway, we take nominations, and then those nominations are voted on by the existing board of directors, and then usually the first of council meeting after that, I carry that nomination or that election over to our city council and the mayor and they ratify that director who was nominated.
Christopher Mitchell: That's good. I'm a big fan of staggered terms in general, because I have a real distrust of day-to-day politics getting in the way of what you all do.
Bret Carroll: I'll tell you this, we have a great relationship with the City of Conway. And years ago in the eighties, they did a whole blue ribbon committee commission to look at some of the major boards in the City of Conway, because they felt like the same people were serving all these boards, there wasn't an opportunity for just a typical citizen to get a chance to participate. And so that's when you had more members that were on the board for 15, 16 years, and that's not really the way that it ought to be. You ought to have an opportunity for people, your boards should look like your community, and people should have a chance to participate. And that change, I think, has made a lot of difference. Now, board members can serve again, but they have to wait seven years before they can be nominated again to serve on a board.
Christopher Mitchell: Excellent. And then within Conway Corp then, is the electric side fully separate from the broadband side, or how does that work?
Bret Carroll: So we essentially have four distinct departments. They operate independently. So we have the electric department, we have the water department, wastewater department, and then telecommunications. And so we have four separate audits on all those respective departments. We try, for each of those, to stand on their own in terms of they have their own balance sheet, they have their own income statement, they do their own financing. Granted, there's probably a little bit of cross subsidization that takes place from the electric department. But for the most part, all those departments stand on their own. And I think that's really the best way to do it in terms of pricing signals to our customers. If all of those things were co-mingled together, then how would you know if we're really offering the right price for your products and services.
Bret Carroll: And so from an electric water and wastewater perspective, we really do that based on cost of service. And we do really the same thing for telecom, except that it's a little more market driven. Those rates, I will say this, our electric, water and sewer rates, our board sets them, they're approved by the city council. But when it comes to telecommunication rates, our board can set them independent because the bottom line is, if we're not competitive, our customers can choose other providers. That's not true with electric, water and sewer.
Christopher Mitchell: Now you said a little bit of cross subsidization. I have to warn you that sometimes people want to blow things up when someone says something like that. So what does that entail entirely just to make sure it's nailed down?
Bret Carroll: Well what it entails entirely is the electric department owns the property in the buildings that we work out of. In terms of electric bills, water and sewer bills, we have employees that work for those respective departments. And so the rates for electric, water and sewer and telecom really pay for all of the expenses associated with serving the customers for those respective products and services. Really, the big thing is the fact that, with exception of our data center, the telecommunications department owns the data center. But the building that I'm in, the building that Jason's in, really the electric department owns that property.
Christopher Mitchell: So the electric department paid for the chair that you're in?
Bret Carroll: That's correct. That's correct. Yeah.
Christopher Mitchell: There is someone somewhere who will be annoyed by that. I'm sure you hear from that person on a regular basis in your town.
Bret Carroll: Yeah. I think we're real transparent with our customers. And when you look at, again, our value proposition, we have the lowest electric rates in the state in one of the lowest cost states in the country.
Christopher Mitchell: Yeah. I know that because my uncle moved there for that reason.
Bret Carroll: Oh, really? Okay.
Christopher Mitchell: Yeah. He's up in Berryville.
Bret Carroll: Yeah. He lives where, in Berryville?
Christopher Mitchell: Yep.
Bret Carroll: Okay. North Arkansas. Well, I'll tell you the people that appreciate it us most are the people that move here from somewhere else or the people that leave and go somewhere else. They realize when they got that one bill with everything on it, electric, water, wastewater, telecommunication, security, phone, and they look at that total bill and they typically get, when they move away, an electric bill that just the electric part is more than all the products and services on the bill provided by Conway Corp. So yeah, some customer might get annoyed by it, but I think when they look at their bill, they think and know that it's true. We're offering a really good value and we're very cost conscious. We don't necessarily want to be the cheapest because we want, as Jason mentioned a minute ago, we want to make sure we're plowing money back into our plan. It's important. And you don't have fast, reliable service unless you're doing that.
Jason Hansen: All of what we did that survived the pandemic and how we've evolved our services and why we have the market share that we have is because we've continually invested in that infrastructure. And it takes time. It doesn't happen overnight to make those changes. Those changes take time to make. Like Bret was saying, we're planning five and 10 years out on what we have to do. And so how does that translate to the technologies and the equipment that we place out there in the system?
Christopher Mitchell: And to that point, you had mentioned 15 year cycles. You're 11 years into that cycle. So I'm guessing that you're looking ahead right now. What do you see on the horizon?
Jason Hansen: That's the next step. We've already started that evolution. I would say we're probably really in our final push of maximizing our HFC plant with a lot of the pieces that we've done over the last 11 years, since that last upgrade. A lot has happened in there. Again, I mentioned upgrading to the one gigahertz plant. We collapsed all of our analog video that we offered in the system. We migrated to a bunch of Node +0 designs in the system. About 70% of our system is Node +3 or less. We reallocated spectrum. We deployed DOCSIS 3.1. We've expanded the upstream spectrum. We've launched app-based TV, or IPTV. All of those components in this last decade, right, leading up to this, is allowing us to really maximize the HFC plant to its fullest extent without necessarily looking at DOCSIS 4.0 or anything like that.
Jason Hansen: And what we've done is we've made the decision that fiber, in Greenfield to start out with, is where we're at. We're going to an XGS-PON, all fiber network. We actually have customers that will turn up probably in the next 30 to 60 days in those new subdivisions. And then as parts of the plant need rebuilds over the next several years, then those will be evaluated on, is it more cost-effective to make some changes to HFC and continue down the road, or do we replace it with XGS-PON going forward? The biggest challenges you have with PON and making those changes is getting in the customer's home. That's the single biggest change factor for our customer, is getting in there to address their equipment needs if they have to change that. And so those will be some of the big challenges that we've got going over the next several years.
Jason Hansen: But fiber is definitely out there. We've completed a fiber master plan a few years ago, and we started planning for what those major fiber trunks look like and how we develop those. But again, all that takes time. And so we wanted to make sure that we can maximize our HFC plant to its fullest extent while we're making that transition and as we continue to make that transition
Christopher Mitchell: And for people who are trying to figure out what some of that means, because I appreciate that a number of our listeners love it when we get into those level of details to know, not just that you're doing fiber, but exactly what you're doing with it. But the XGS-PON is the next version of fiber-to-the-home for a certain branch of the passive optical networking, for the folks who don't know.
Jason Hansen: And it's essentially 10 gig PON, is what it's capable of.
Christopher Mitchell: But so much more, right?
Jason Hansen: It is, and we looked at the option of just doing a regular GPON type deployment to get started. And again, we've tended to look a little bit further out. It may cost us a little bit more on the front end to get out there, but we'd rather be a little bit further ahead instead of making a small iteration, we want to make a larger iteration. So we're prepared as that happens. And so as more and more folks deploy XGS-PON, it'll drive down the costs of what those additional XGS-PON deployments cost. And so, we should be on the front end of that for getting ready for it and be able to take advantage of it as more and more people start to deploy it from a cost perspective as well.
Christopher Mitchell: Something else that I see in communities like yours is often the neighbors start to say, "Hey, we're getting kind of jealous of what you've got over there. Would you mind expanding?" Are you feeling any of that pressure, any temptations? What's next in that regard?
Bret Carroll: You alluded to it in maybe one of the earlier questions or some of the questions you sent about the legislative landscape changing in Arkansas that will allow us to serve other areas if we chose to do that. And really, our mission, our vision and our mission is for the City of Conway. And we are certainly evaluating areas just on the fringe of Conway. As it stands now with recent legislation, we can basically serve wherever we want to. And I will tell you that if we do that, wherever we serve outside of the city, it has to make good economic sense for us and that has to be first and foremost.
Bret Carroll: But we do have people right on the fringes that are going, "Hey, we moved out here. We like the fact that we bought this piece of land. It was a little cheaper out here, but my wife is killing me because we don't have good broadband. We don't have WiFi. We're probably going to move back into town if we don't have any way to solve that." So we're looking at some of those densely populated areas, just on the fringes of Conway. And I think those are the areas that make a lot of good sense for us to serve. There's a lot of federal money that's being thrown around for those kinds of things. And I think we like to go out and get those customers while we can. So certainly, on the fringes of Conway, we're looking at places we can serve. But reaching far beyond that, that's not really on our strategic planning process right now.
Bret Carroll: Certainly, if there's other municipal public power companies, and they're interested in doing that, we'd talk to them and see if there's some sort of way we can help, or if there's some sort of partnership that makes sense. But our mission and vision and core values has always been really centered around the City of Conway. And so we want to entice people to move here, we want to entice areas to annex into the city. And so those have always been carrots that we have out there to get people to try to move the Conway or to annex into the city.
Christopher Mitchell: Well let's finish up with, within Conway then. What are a couple of anecdotes or just any stories that sort of... I like to think of it in terms of this is hard work, you got a lot of responsibility. What makes you glad you're doing this rather than something that might be easier?
Bret Carroll: This past 12 months has really confirmed what we always knew working at the local utility, and that is that local broadband for us is an economic driver, it helps with quality of place for our community. Our customers have gotten to the point where they expect broadband reliability to be just like electric, water and sewer. 99.9 is what they're looking for. But we really are doing innovation hub here in our city. It's called the Arnold Innovation Center, named after our previous CEO. And it is going to be a co-working space. I'm looking at it right now through my window. It's in downtown Conway and we're going to provide all the high speed Internet, all the telecom for that building. And really, hopefully it's another, kind of the next evolution of economic development. And I don't think you could do that unless you could offer the kind of broadband service that Jason and his team and our operations teams have been able to develop. And so I think that's something that we've learned.
Jason Hansen: The pieces, from the community perspective and what the network does, the most recent one being the pandemic and the remote learning and the teleworking that we had to provide. And customers that were in Conway, customers of ours for sure, went into that remote learning or that virtual schooling or the teleworking that they were doing with the hopes that their Internet was going to hold up and that was going to do what they needed to do for them to be able to do that. And it did. To me, that's one of the most important things that came out of the pandemic piece is that we were able to provide those opportunities for folks to be at home and use their Internet product, to actually continue to do their lives and stay in touch with people and work and do schooling.
Jason Hansen: But we've taken, and we've used the system in a lot of different ways. We deployed, over the last several years, an AMI deployment, which uses our entire internal network. So our automated metering infrastructure is based on and runs across our own network to read all the electric and water meters in the city, on a daily basis. City government uses it. We connect all of our city government facilities up with fiber. Our public schools, again, Bret mentioned early on, we were founded around education. We talked about that 1995 rebuild and forethought in what's there. In 1995, at the time, we dropped fiber at every one of the schools that was in Conway at that time. We didn't turn it on, but we laid the groundwork in 1995. So in 2010, when all those schools wanted to be connected up with fiber, we were actually able to connect every school in Conway with a one gig fiber at the time, and now it's a full 10 gig network between all of the public schools in Conway.
Jason Hansen: Same thing with our higher ed here, we've got connections with those and telemedicine for the hospitals. We've connected a lot of that up with the hospitals. So I think there's a lot of reasons the network is important to the community of Conway and why we've provided there. And I think that's going to continue to evolve and we're going to continue to bring more and more of those opportunities to bear with the network that we have. And I think communities without this type of a network, certainly are going to have challenges from an economic development perspective and things of that nature. And we were fortunate that there was some really good forethought and some of the leaders early on about bringing some of the systems that we had here. And we've just built on it, that's all we've done. We've taken what their vision was and continue to build on it and continue to expand it, to provide services to the city.
Christopher Mitchell: Excellent. It's exciting and hopefully there's whole new generations of folks who are coming into Conway right now who will never want to leave. So thank you. Thank you both for your time. I appreciate it.
Bret Carroll: Thanks for having us.
Jason Hansen: Thanks for having us.
Ry Marcattilio-McCracken: That was Christopher, talking with Bret Carroll and Jason Hansen. We have transcripts for this and other podcasts available at muninetworks.org/broadbandbits. Email us at email@example.com, 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 and other podcasts from 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 the song Warm Duck Shuffle, licensed through Creative Commons. This was episode 457 of the Community Broadband Bits Podcast. Thanks for listening.