Transcript: Community Broadband Bits Episode 458

This is the transcript for Episode 458 of the Community Broadband Bits Podcast. We're joined by ILSR's senior editor and reporter, Sean Gonsalves, Doug Seacat, Owner of Deeply Digital and Clearnetworx, and Casey Irving, Director of Business Development, about bringing world-class connectivity to households in and around the city of Ridgeway, Colorado. Listen to the podcast here or read the transcript below. 

Doug Seacat: We ended up losing five-four and I remember driving home, I couldn't get home because there was an avalanche both on 50 and 70. So I'm just sitting on the side of the road. It was a rough day that day.

Ry Marcattilio-McCracken: Welcome to Episode 458 of the Community Broadband Bits podcast. This is Ry Marcattilio-McCracken here at the Institute for Local Self-Reliance. This week on the podcast, Christopher is joined by Doug Seacat, owner of Deeply Digital and Clearnetworx, and Casey Irving, director of business development. ILSR's senior editor and reporter, Sean Gonsalves, also joins the conversation.

Ry Marcattilio-McCracken: The group discusses a hard lesson learned by Clearnetworx out near Ridgeway, Colorado. Around five years ago, Clearnetworx won a Colorado broadband fund grant to build a fiber to the home network for the community, only to have it challenged by incumbent provider, CenturyLink. Subsequent appeals ultimately led to a situation where CenturyLink won the sum needed by Clearnetworx to build fiber to the home, to instead modestly upgrade its DSL network.

Ry Marcattilio-McCracken: Clearnetworx has continued to pursue its roadmap to the area and made significant progress in bringing world-class connectivity to households in and around the city, but the decision left residents in the area with subpar internet access for years after. It's a situation that speaks to the need for local officials to become conversant in broadband issues, so the same thing doesn't happen to them, and the potential problems of right of first refusal policies. Now here's Christopher, talking with Doug, Casey and Sean.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Christopher Mitchell at the Institute for Local Self-Reliance in St. Paul, Minnesota, and we have a special guest today from my side, so we're going to be two on two today, are two folks who are not from the Institute for Local Self-Reliance, are from Deeply Digital and Clearnetworx. And the first person is Doug Seacat, who's been on several years ago. Welcome back to the show, Doug.

Doug Seacat: Thank you. It's good to be back. I'm excited to talk about what we love doing.

Christopher Mitchell: Yeah, so you're from Western Slope. You own Deeply Digital and Clearnetworx. You've been trying to solve rural broadband issues, as well as running a company that does other IT consulting type stuff, if I remember correctly.

2:33

Doug Seacat: That's right. Yeah. Deeply Digital no longer does IT consulting. We just build fiber now. That's all we do, consult, build and manage the fiber networks.

Christopher Mitchell: And that keeps you plenty busy from what I can tell.

Doug Seacat: There's a lot going on, and then Clearnetworx is the internet service side of our business and it is very busy, as well.

Christopher Mitchell: Excellent. So we also have Casey Irving, who is the director of business development for both Deeply Digital and Clearnetworx. Welcome.

Casey Irving: Yeah. Hey, thanks for having me on, guys.

Christopher Mitchell: No, I appreciate it. And then, we have special guest, Sean Gonsalves, who reported this out for us and some working with me on some writing about some of the things that are going on in Colorado's mountains. Sean is senior reporter and editor on my team. Welcome to the show, Sean.

Sean Gonsalves: I'm loving it. Glad to be here.

Christopher Mitchell: Excellent. So, the first thing I think, is Doug, can you just catch us back up to speed. I mean, we did a half-hour discussion about all the things that had happened in Ridgeway, but what's your 90-second version of what happened in Ridgeway over five years? And I guess maybe start with what Ridgeway is.

Doug Seacat: Well, Ridgeway, it's kind of almost where we got started and I had a partner at Clearnetworx. We were kind of competitors to Deeply Digital on his company were on track. The communities asked us to work together because we both were building fiber in some of the same areas. Well, he lived in the Ridgeway community and really wanted to do something up there, so they were one of the first communities where we started, and they were the first grant that we went after with DORA and ended up winning that grant, then ended up telling everybody how excited we were, and then ultimately losing it to CenturyLink.

Doug Seacat: They took that money and built, or upgraded their DSL plant. And so yeah, five years later, people are still have 25 megs, approximately, up there. The DSL is better there than it is in most other communities. They did definitely build some fiber to some of [inaudible 00:04:32]. But our plan was to build fiber to the home and that never was done. People have DSL.

Doug Seacat: There was a lot of road construction up there in the last few years. They've kind of upgraded the town's road ways, and so a lot of that DSL has been cut just in the last five years. So, it's even an older plant than it was before, even though it has some newer equipment. So, reliability has been a problem. So, we continued on our quest to build fiber to the home. We just have been doing it on our own dime now instead of with that DORA funding, so it's taken us a little longer.

5:08

Doug Seacat: But this last year, we've had some cool milestones. We built out the entire town with fiber, so we can get fiber to anybody downtown. We've had the business district has been covered for a while, but now we can get to most all the homes. There's two communities on the north and south that we still not fully finished, but, and then we also were able to... We're building, Deeply Digital is building a fiber link to Ouray, which goes through Ridgeway, and one of the problems that we've had is, there just hasn't been fiber to the town, either. So there's fiber there, but the capacity has been to a place we couldn't provide real good service up there, so.

Christopher Mitchell: Basically, I just want to get back on this for one second, because you guys are going after what you call the DORA grant, which is a Colorado broadband grant under a program that has acronym DORA. And you did a lot of work and you put together a grant to build fiber to the home out for a cost of $800,000. The state of Colorado said yes, and CenturyLink appealed it, and the state said, "No, we're not going to sustain this appeal."

Christopher Mitchell: And then through sheer luck, which we covered in the other podcast, CenturyLink had a second try to veto this project, effectively, or to take over the project, really, and they happened to have the right number of commissioners show up that had no idea what they were doing, such that they thought a fiber to the home project that cost the same amount as modestly improving DSL to the same number of households, which they misunderstood because they didn't read the maps correctly, basically. They decided that it would make sense to give CenturyLink all of that money that it would have cost to build every home fiber to the home so that they could modestly improve DSL, and I have to think that whoever at CenturyLink really went after that challenge probably deserves a promotion because that's just crazy.

Doug Seacat: Well, you got to remember, I mean, I was kind of new to the scene of all that and I'd go in to those board meetings, and it was CenturyLink's attorney law firm against me. And I just remember using one example saying, he was talking about his vacation. He's like, "I have unlimited vacation where I work at CenturyLink. I'm their attorney," and telling us how what a great job he had, and... [inaudible 00:07:30]. I want to be that guy.

7:35

Doug Seacat: No, he just, he somehow got the board to think... We had maps on the screens, overlaid. I had taken their map and our map, put them on top of each other. They were identical, but CenturyLink and this attorney was able to get them convinced that they were going to serve about 1,200 people, where I said we were serving 536 buildings, basically. Never figured out how many people were in each building, but we know that on average, I think it's 2.2 is what kind of standard is talking about per building.

Doug Seacat: Anyway, they used the people number instead of the building number, and the board took that. We ended up losing that appeal, the second appeal, and I walked into that second appeal thinking, "There's no way I can lose." I'm looking at maps thinking, "We're providing the same service that we're providing fiber," it's. They turned them, they denied the first appeal, so why would they in any way not deny the second one.

Doug Seacat: And we go in and that attorney was able to convince... It was a five-four judgment. [inaudible 00:08:43]. It was a really snowy day that day, so I think typically the board has 15 or 18 people on there and there was only nine people voted so, and some of them were voting from remote because they couldn't get in because of the snow. And we ended up losing five-four, and I remember driving home, I couldn't get home because there's an avalanche both on 50 and 70. So I'm just setting on the side of the road, [inaudible 00:09:07] avalanche to clear so I could go home. It was a rough day that day. We actually were doing it for 1.1 million, and that was the other thing, is CenturyLink said that they could do it for about 880,000 or something, upgrade the DSL, so.

Christopher Mitchell: Yeah, I mean, it's remarkable when you say, "I can build an interstate for $1.1 million," and someone says, "Heck, I could build a dirt road to more people for almost the same amount of money." 

Doug Seacat: Yeah.

Christopher Mitchell: Okay, so one other thing I wanted to clarify, and that was that although you mentioned the fiber connection into town, and if I got it right, you had a few customers on a fiber connection but it really wasn't able to support either the cost or the reliability or the speed, everything you wanted to do. And so, you needed to find an alternate path to deliver higher quality bandwidth that you would then use to connect everyone. Is that right?

9:58

Doug Seacat: Yes. Yes, I would have won that grant five years ago. We had the way to get better internet or a higher-capacity circuit. There's fiber up there on the power poles through Tri-State, and CenturyLink and Zayo both have access to some of those fibers. We've used Zayo for the last eight or nine years up there through the EAGLE-Net. That project was built fiber to those communities, but Zayo has never been able to upgrade just the equipment. All it is, is a switch. The fiber's great, it's just the equipment, and Zayo didn't want to do that. CenturyLink could do that. It's just we were able to build fiber up there faster than we could get Zayo to upgrade their equipment, and then CenturyLink is just extremely expensive because they knew what we were doing, so.

Casey Irving: Ridgeway's not the only community we have that problem in, either. I mean, obviously we use their fiber and the fiber's great, like Doug saying, but sometimes it's just there's issues on, yeah, trying to get them to upgrade equipment or fix equipment in certain cases. I told them I'd be happy to go swap the equipment for them, might even inspect the equipment, whatever I need to do, but we could not get equipment upgraded.

Christopher Mitchell: So, that's all... I think that's really good detail and that's actually one of the problems with having so few middle-mile options available. And so, I'm glad that people get a sense of that. Sean, is there anything about Ridgeway that you want to weigh in on, ask a question about before we switch to a new gear?

Sean Gonsalves: No. I guess I just really was interested to know a little bit more. I mean, Ridgeway itself is a rural community. Can you give us any sense of how many households per mile? I mean, how sparsely populated that is and what kind of challenge that creates, in terms of building fiber to the home?

Casey Irving: Well, the town of Ridgeway is actually... I mean, it's fairly dense for a rural, I guess, setting if we're describing that. There's some density downtown and some homes and some neighborhoods that are pretty close by. I think the... We estimate everything off of serviceable addresses, how many buildings we can hook up. And I wanted to say that Ridgeway, we found kind of in the 800 mark, as far as the downtown areas and the high-density areas, but there's a lot of residential areas all surrounding that as well, that still needed...

Casey Irving: They were a lot worse off than Ridgeway was. And so, we've also started tackling those communities as well, communities where there's not power poles, so it's a lot more expensive to build fiber in those areas. And yeah, those homes are really spread out because everyone up there wants to buy acreage, as well as their house, so. Really neat communities. It's all mountain towns kind of area and everyone lives up there to get out and be in the mountains, but also needs high-speed internet so that they can login remotely from home or stay in touch with the world, too. So, we've been kind of tackling the communities around there, as well.

12:57

Doug Seacat: And part of the problem there, wireless is not a real good solution because of so many trees. It's, there's decent hills around, but to try to get good... We want to build towers where we can get fiber to, so to get a tower where you can see through the trees or over the trees is difficult. So, really, fiber is the best solution, but yeah, people are so spread out.

Doug Seacat: And five years ago, when we were doing this grant, we really did not have a relationship with the power company up there. The power company, their stance was, "We want nothing to do with fiber." And over the last few years, Casey and I and region 10 and the community has really worked with the power company up there, San Miguel Power, and they've come around to where they've given us access to all their poles.

Doug Seacat: So, we're extremely excited with that relationship. It's really opened up a lot of doors that are going to allow us to get the fiber outside of downtown area. Obviously, there's an expense there, but it greatly reduces the expense and the time to get to some of these communities that are farther out of town. We kind of work with DMEA in the Montrose side, so DMEA has started their own internet company

Christopher Mitchell: They're a electric cooperative that we've talked about before, for people who are interested in looking them up. Delta-Montrose.

Doug Seacat: Right. And their service territory kind of ends halfway between Montrose and Ridgeway at Colona. And so Colona, south is San Miguel, and San Miguel doesn't have any plans of doing their own fiber service, so working with us has really worked well. We're getting some fiber to some of their, because their customers are asking them why they're not doing stuff like Ouray and their stance is they would prefer to support small business. And so they're working with some other ISPs as well, but we're predominantly to the largest that they're working with and really have plans of serving the entire county of Ouray at some point on their poles.

Sean Gonsalves: The utility that you mentioned it with the poles and the relationship that you've developed, what was it about that relationship, I mean, that kind of brought them around? Was it the relationship itself, getting to know you guys, or was it some other factors that really made them, say, "Hey, let's work together."

15:21

Casey Irving: I think it's been a very slow burn for a while there, and then we were just forming relationships with them, begging and pleading, "Can we please have access to these poles? We're going to do it the right way." We were kind of viewed as maybe the small guys who didn't know much about pole access or putting stuff up there, mounting it correctly. And so that's, I think, what their concern was, but over time, we started proving ourselves to them. We got access to a little bit at a time and kind of proven, forming relationships over there, talking with them about the solutions we're trying to implement and working with the communities and getting the communities involved and kind of bidding on our behalf.

Casey Irving: And then I think one of the biggest breaking points too, we got to is, at the start of COVID, there was a bunch of students who needed access to internet up in the Norwood area, which is another one of their service territories and there was no internet up there. I mean, the entire town was fed by a wireless link into town and that's how CenturyLink got their feet and then provided DSL and it was terrible. Maybe tops, five megs in some cases, but most people are getting between one to three megs of download speed. 

Casey Irving: I mean, San Miguel recognized the need. We were trying to develop fiber up there at that time and so they said, "Hey, whatever you guys need, we're going to help you out with," and they kind of gave us free access to go put stuff on the poles, get it out to some wireless towers that we felt like could feed an area with high-speed internet, and then also building out fiber to some of the students and teachers. So at that point, it's like it was definitely a big change in our relationship and it was super helpful that they were able to just kind of let go and say, "Listen, you're going to figure this out for these kids. Go do what you need to do and we'll figure stuff out on the back end." And we were super appreciative of that.

Christopher Mitchell: Yeah, we're going to come back to that and talk about the schools. And before then, though, I wanted to ask. I'm really curious about the second application for a DORA grant after that first experience, what it took, and what your mindset was, and just in general, to go back into that program after that experience.

Casey Irving: I'd like to start off by saying that Doug and I stayed up till 1:00 in the morning writing that grant. The very first grant. We didn't know anything about grant writing. We were going up against all these people-

Doug Seacat: It was 11:59.

Casey Irving: Who were paying, yep. [crosstalk 00:17:27] thousand dollars-

Christopher Mitchell: Yeah, but you can't go to sleep at 12:01. You're amped up still, I'd imagine.

Doug Seacat: No, it was due at 12:00, so we got it in at 12:00.

Casey Irving: Yeah. We [crosstalk 00:17:36].

Christopher Mitchell: Yeah, but that's what I'm saying. Then you got to go out for a drink. You got to wind down a little bit.

Doug Seacat: Well, I see. Yeah, yeah. Yeah, it took a while.

Casey Irving: We were reading through making sure we spelled everything correctly at that point.

Christopher Mitchell: Oh, that's, that's more effort than a lot of people give, from what I can tell.

Doug Seacat: We were asking for a million dollars. I didn't know what that... I mean, at that time, look [inaudible 00:17:52] was a million bucks

Doug Seacat: And that was a lot of money to us. And we spent some time. It was just us. Obviously, the other guys, some of them, I hired consultants, or

18:01

Doug Seacat: CenturyLink.

Casey Irving: We were going up against all these consultants who knew what they're doing, and we just felt like the little guy. So, we were thrilled when we got the application, obviously. It was just an immense crash coming down from essentially writing an application for someone who didn't even apply and handing them all that money that, a competitor, so.

Christopher Mitchell: So the second time, what happens?

Doug Seacat: Well, it took me a couple years to decide. I mean, I think Casey maybe talked me into it. I was like, "I'm tired of this. We'll go find our money somewhere else," because I felt like we're designing it and there's no guarantee that we're going to get it. It's like you're handing it to your competitor and I felt like the same thing would happen.

Christopher Mitchell: Now let me, sorry, let me jump in for a sec because I really want people to know that that's not the case today, now. I mean, it still, you're still at a disadvantage, but because of you guys, Colorado improved the language, so that if a company wants to steal a grant from someone like you, they have to hit the same price point and they have to use the same technology, [inaudible 00:18:54] deliver the same capacity, at least. And so, that was an improvement, at least. So I mean, your suffering did lead to benefits for other communities.

Doug Seacat: Yeah. Yeah, it definitely highlighted a weakness there. They worked through it, and we're excited now. It works better. CenturyLink has not really been been a participant in the last few rounds, and-

Christopher Mitchell: What, sorry. I mean, I'm just going to keep being rude, but people need to understand, at this time, CenturyLink is cashing checks from the federal government every month that add up to a total of more than $3 billion over six years, and they're trying to take grants away from you guys for $1 million. I mean, it's just unreal to me how they just exist to cash checks from poorly-designed grant programs, it seems like. And then, anyway, I just want to make sure people understand that it's not like CenturyLink's business case rose or fell based on screwing you over.

Doug Seacat: I don't think it's as much for them getting the funding that we're getting, as stopping us or slowing us down because we are being pretty productive and effective of where we go. If we bring in fiber against their DSL, they don't have a lot of, much of a chance. So, us having to fund it ourselves just slows us down and gives them another three to five to eight years of profit before we take their customers. So, I think it's less of them getting the million bucks as much as slowing us down from that.

20:23

Christopher Mitchell: Sure. So, you did go for a second grant, then. What happens?

Casey Irving: Yeah, actually, the second grant was pretty close. It was a region called Loghill, which is north of Ridgeway, and that was one of those communities that I mentioned earlier that's all underground. They're, all the homes are really spread out. There's... The grant total had about 542 homes in it, and gosh, I mean, just looking at the map, it's an immense area that we have to cover with underground fiber. So, that was the second application we put together and actually, the first time it was denied. Apparently we didn't meet the minimum requirements, but we appealed that decision. This grant has an appeal option, so we went back to the board and had the chance actually to present in front of them at that point, and say, "Hey, these are the reasons why we feel like this area is underserved." And we showed them this is what's up there. CenturyLink and a couple of wireless providers.

Doug Seacat: With cellular wireless, you can't... Their trees are so big. They're very, very few people [inaudible 00:21:16] wireless. So, it was really denied because of CenturyLink showing that it served the area, but-

Casey Irving: And there's a map that everyone reports to, to show what speed areas, what areas are in need of broadband services, and the concern with the board and the concern with pretty much every provider who applies for grant, is CenturyLink just puts all of their areas as served. "Hey, we provide over 25 by three speeds here. There's no need for a grant." So, we had to go in and provided close to 60 speed tests, I think, from all the residents in the area, letters of support, people just emailing the board saying, "Hey, I'm supposed to get 10 megs per second. That's the highest they can provide me and I'm lucky if I get three to one." Just all that kind of stuff. We ended up winning that application and we're in the process of building that out right now.

Christopher Mitchell: So this, in some ways, I think maybe restores your faith a little bit. And I want to move this into the discussion about the schools, which you were mentioning with Norwood. But when we were talking about something else, Casey, you jumped in, and were talking about your approach to how you think we should be using subsidy money that is going to make sure that kids have connectivity outside of schools. A lot of that money came about during the pandemic. Just tell us how you got there and how your model works, like how you developed it.

Casey Irving: So yeah, there was a grant that came about some time back in November of last year that school districts were actually the only people that could apply for it, and it was called the connecting Colorado students grant. It was part of some of the stimulus money that had made its way down from federal down to the state, and ultimately into the Colorado Department of Education.

Casey Irving: At that time, there was only about two million in the fund and we reached out, talked to a couple school districts in the area, and just kind of vaguely talked about concepts with them, but nothing really came of that. And eventually, they ended up adding another 20 million to that fund and making it available to apply for again in December. So, at that time, we reached out again, and really went over our plan with specifically three school districts and then tried to get some other ones involved, but the deadline was so short for those applications because that money had to be spent by a specific date and actually handed out to schools, I think, by February of 2021. So, they were basically putting out maybe a week or two before it was due.

23:30

Casey Irving: And just to jump back for a second. In the beginning of the pandemic, there was a few communities that we were actively building out that needed better connectivity. So Norwood was one of those, the rural parts of the Norwood area, but Telluride had the same issues. Ouray, Ridgeway had similar issues. So, since we were actively developing in those communities and all those students and teachers had to go to remote learning, some... Well, again, we mentioned we worked with SNPA, but the Telluride Foundation also contacted us and asked if we could work with them on a program to try and get some of these people connected.

Casey Irving: So, they came up with some funds for us to go and build out infrastructure in areas that didn't have any high-speed internet. I mean, CenturyLink one to three megs per second. So we put up wireless towers. We built out fiber infrastructure to those towers. We also built out fiber infrastructure to homes and students who we could reach with it. And then-

Doug Seacat: In under about two months.

Casey Irving: Right, it was very quick. We ramped up very quickly with, I think at that time, we had probably 30-ish people working for us, and maybe two installers. And we ramped up really quick to do, I mean, it was close to 200 installs within a month, I think, to try and get everyone connected. And then, we provided a lot of those students, in partnership with the Telluride Foundation, a year of free internet. So, students and teachers who didn't formerly have access to internet, we gave those guys a year of free internet.

Casey Irving: So we thought it was great. It was a great program that worked well because we got infrastructure out in areas that were underserved. We were able to hook up other people. So, it was a benefit to us as a company, but it was also a huge benefit to the students and teachers because they got reduced-cost internet and they got internet for replacing their CenturyLink DSL. And it was long-term, was the biggest thing.

Casey Irving: The programs that we did in Montrose were not that way. We tried reaching out to the school district, but it just didn't, the time didn't fall together and we didn't maybe talk to the right people. What happened in Montrose was basically a free installation and two months of free internet service, and that's what us and the local power company, DMEA, was also doing. And now we're like... I mean, that's kind of nice, because I guess you can get hooked up, you get maybe better internet, but the people who are really affected by that, it's not that they didn't have access to the internet, it's that they couldn't afford the internet, so maybe kids who were on free and reduced lunch or families that were financially restricted from internet access.

Casey Irving: But two months of internet didn't make a difference. The school year, obviously, lasts longer than that, and so once the two months were up, no one could afford it, they'd have to cancel the internet service. We ended up just extending it. I mean, we just said-

Doug Seacat: [crosstalk 00:25:55] Kept giving them free internet.

25:56

Casey Irving: People would call in and be like, "Well, I can't afford the next few months so I'm just going to cancel." We'd say, "Okay, now you can just have the internet for free." But ultimately, this grant came about. So, we talked to the Montrose County School District, which is our hometown where we operate, we talked to the Norwood School District, and we talked to a town that we have a public private partnership now with to develop broadband in, which is Bayfield. And we got them to go after quite a bit of funds, about $2 million, I think, $2.1 million in total of all the school districts.

Casey Irving: And our plan for them was, whatever money you apply for, we're going to take that money, go expand it into areas that are low income and don't have access to high-speed internet. And then, we're going to match that on the back end with free internet service. So, you give me 700,000. I'm going to go build fiber as best as I can for as little cost as I can into these communities, get people hooked up with fiber internet. And then, because you gave me 700,000 to pass all these students and then also hook up other people, I'm going to match in 700,000 of free internet for students and teachers.

Casey Irving: So we ended up putting together a few programs. Basically, we have priority addresses, which were free internet through 2024. So, we're creating a long-term fiber internet solution for those students. That was also a free install. And then, any other students and teachers within these fiber zones that we designated these are areas we're going to go build out with fiber, we gave a $10 discount off their monthly internet service, off of any fiber internet plan they wanted, and then a free installation.

Casey Irving: So, we are offering fiber internet 200 megs per second for 45 bucks a month, and free internet, or free installation. And we're in the process now, we've got that plan developed and we're rolling that out with the school districts as we speak. We're kind of ramping up our, finishing up our design and permitting phase and moving into construction, trying to get all these zones lit up this summer and get everyone hooked up before the fall.

Christopher Mitchell: There's some people that get free service through 2024. There's some people who get it for one year, although you're pretty... As long as your capital costs are covered, you guys can be pretty generous with making sure people can stay on. Just for a second, how do all the different costs work exactly?

Casey Irving: The way that the funds had to be spent because they were part of the stimulus money, the money had to be expended by January 2022. So again, the best way to do it, we felt like, was infrastructure. You give us the money up front, we're going to use all of that money to go build infrastructure, and that was how the grant could be used. We could go and expand it into areas that didn't have service.

Casey Irving: And then Clearnetworx is just going to create programs on the back end. As a benefit to the school district, we're just going to create these programs to help out students. The first program, which we were calling priority addresses with the school districts, is basically, "Hey, you have kids who are financially not able to access the internet and you tell us who those people are, we're going to give them free internet access."

28:34

Casey Irving: So we set up forums, we set up marketing, we're doing door hangers, basically advertising throughout all these zones, and direct mailers. People from the school district are going in and telling people, "Hey, go fill out this form." The school district verifies for us who is on maybe free and reduced lunch or who's a priority address dependent on their financial situation. They provide that list to us and say go hook up these people and then we're giving them free internet all the way through 2024.

Casey Irving: The second major program that we had was the $10 discount, and that just applies to any member of the school district. So, if you're not financially challenged, but you still want internet access, because who doesn't need that when you're either a teacher or a staff member or even a student. So, they all get a free installation and $10 off their monthly bill for any fiber internet plan. That program also lasts through 2024. And we mentioned in the school district, but we're really looking for ways to find ways to extend this. There was other interested parties and who doesn't want to help out students and teachers, so. [crosstalk 00:29:33].

Christopher Mitchell: I can name a few national companies.

Casey Irving: Yeah, now in 2024, who maybe wants to give more to the program and maybe we can expand it. And that's what we're looking to do is... It creates a long-term internet solution, reliable and affordable internet solution for students in our area and we feel like it works really well for both us as the internet company, and the students and teachers in the school district. So, we're happy and excited to try and expand that.

Christopher Mitchell: So you guys have used that program creatively but others have been much less ambitious with that kind of program, right, using the same source of funds.

Doug Seacat: All we're doing is asking for payment upfront, and then we can extend it farther. So, we've done that over the years. When we first got started, we'd have companies give us $10,000 to build to their building, and then give them internet back over a period of time or something. And it's kind of the same way as, "Hey, just pay us upfront for the next three years, let us go build stuff, and then we'll give you internet for that period of time."

Doug Seacat: And it works well in this situation, because there was so much money in that fund, it was hard to expend that much money in nine months, or whatever the government gave the schools. So, that's fine. Give us the money now, let us go build, and we can extend it. And I... Before that, the first phase, we kind of did that but we didn't fully understand it at that time. It was more, give us the money, and we were building just out of necessity. There was nothing there, so we're just building it.

31:02

Doug Seacat: Now we're saying, "Well, give us this money and let us extend it for you over a period of time." And I think some of the other school districts have not realized that. They didn't see it. So, they only asked for maybe $100,000 to give their students internet for six months.

Casey Irving: It was a fairly complex plan and when we pitched it, we're pitching within a week of having to apply, so it's hard. Some of these school districts, for one, they're not thinking in terms of broadband. They know it's an issue, but to come in and just hit them with, "Hey, we want you guys to go after a million dollars, and you're going to give it all to us and then we're going to give you this school program." Sometimes it's a little hard to [inaudible 00:31:37] around in that.

Casey Irving: Luckily, in all the areas we've operated in, we have relationships with those guys. They know us because we've been working in this community and providing solutions, and we've helped them figure out some of those things that they've needed. So, it was a little bit easier but it took us a little bit to get everyone up to what we were thinking, "Here's our plan and why we want to do it this way." And then, once they kind of understood, then it was a snowball effect from there. They were really excited about it. They were like, "Great. Let's do this with that, and can we add this on, and how does this all work," and stuff, so.

Doug Seacat: They wanted to work with some of the other ISPs too, but the other ISPs didn't understand it, and we weren't going to go explain it to the other ISPs. So, they have additional funding that is sitting there right now that I believe they're not sure how to use it, 100%. So, we're hoping we can prove to them, "Hey, look, this worked for us, and can we use some of that extra money that you have to sitting there to expand what we're doing."

Casey Irving: And we talked to the state a little while after we had just developed this program, just talking to them about other, some of this stimulus money that's coming down and just kind of filled them in on, "Hey, we're doing the school program." They were like, "Oh, that's super." Yeah, no one's doing that.

Casey Irving: The only thing we see providers using this funding for right now is basically just, "We buy internet service, monthly internet service. So I charge $50 for internet service, the school district is going to give me $50 a month for student A, B and C," but like Doug was saying, it's really hard to find that many students that you can just hook up and then connect all the way through January. And then, that's when the program ends. Why not make it go further and why not put some of that burden on the ISP, who's already building out through that area, to go identify those people and help them notify that you've got a cool program, cost savings that you can take advantage of now.

Doug Seacat: Yeah, and I think in this case, we're all giving love, that the school's helping, the ISP, the private partnership, and then the public, the grant. So, we all have a little bit of skin in the game and it's not just the government paying for internet.

33:31

Sean Gonsalves: There's a lot of excitement around broadband these days. There's a lot of talk in DC. President's talking about the American Job Act, $100 billion investment in broadband infrastructure. There's the Accessible, Affordable Internet for All Act, 94 billion. There seems to be a massive infusion of federal investment coming, but there is this argument out there that says all of that amounts, all this federal subsidy amounts to overbuilding, and that it's, that government shouldn't be subsidizing local networks and the building of these kind of infrastructures.

Sean Gonsalves: And on one level, you can sort of see, well, when it comes to municipal networks, people making the argument that government shouldn't be giving them the advantage versus private companies, but you guys being in a private company in a unique situation, I'm interested to hear your reaction about this whole issue of overbuilding and whether or not subsidies have an important role to play in ensuring we build this broadband infrastructure far and wide.

Doug Seacat: I know... There's a couple things. For one, we know this area better than anybody else, so if they won't partner with local people that understand it, you just give money to CenturyLink and they don't understand that like they do. The people that work for CenturyLink, that live here do, but they don't really get to make those decisions, where we are the guys making the decisions right here in this table and we know what's needed in the area. So, putting it into local smaller businesses, I do think is important. We've always said, and which is crazy, but almost every job that we've done, on grant project that we've done, we've also included open access fiber, and we believe that keeps us honest.

Doug Seacat: So yeah, we want to own the fiber, but there's always 12, 21, 48 strands of fiber that is open access that we either give to the community or the, someone local, the government locally, so that they can use it. We call it an insurance policy. If we're not doing our job, they can always light that up and do something with it, and that keeps us honest. We don't want them to use it and we try to do our very best so that they don't use it, but I think that's helped grease the wheels a little bit, too.

Doug Seacat: They don't feel like they're just giving a bunch of money to some local guy that's making a bunch of money, that we're really in it as a partnership to get it done. That DORA grant was the first experience of grants, but since then, we've really learned from that and really, as a small business, brought in almost $15 million out of [inaudible 00:35:54] grant funds. And most of that has some open access component to it. And we're just continually growing our network and providing really good service, but at the same time, having that open access.

36:06

Doug Seacat: And I think someday, all these networks will have to start combining. It just doesn't make sense, a bunch of little guys. But I think that's where the DORA could improve a little bit, is there needs to be a little bit more of a standardization of how that network's built. When they give us a million bucks, I believe my million bucks is being spent better than some of the other million dollars in the state. And maybe there's other guys doing better than us, too, but there should be some standards there that when we get done with this project, it's going to be a really nice fiber network that someday could be ran by a larger company, if needed, and all joined together.

Casey Irving: I'll just say that I don't know that I agree entirely about the need for consolidation, necessarily. I feel like there are 700 rural electric co-ops that I think run really well because they're run locally. And I would just say that I feel like companies like Clearnetworx, I would hope, don't feel pressure to combine for unnecessary reasons because I feel like having that level of, and I'll just say it.

Casey Irving: I mean, what really resonated with me of what you just said there, Doug, is that, yeah, the thing that pisses me off about people talking about overbuilding in DC is these are people that grew up on the East Coast, they went to East Coast schools, and they look at a map in DC and they're like, "See, this town in Ridgeway already has broadband. I can tell because FCC collected data from CenturyLink that says it does, and it would be inefficient for us to give money to these Clearnetworx guys, because there's already service all over the place. They told us there was." And it's just infuriating, because yeah, we need these local voices. So, there will be some consolidation, I'm sure, but we need to preserve that local rootedness, I think.

Doug Seacat: Well, and I think what I was talking about with consolidation is there's a couple other small companies. You got to have a little bit of a mask to provide the services that are needed, I guess. If we're all just running on small MikroTik routers and just not... At some point, I need enough customers to provide a really good quality service, right. So, I think there needs to be some standardization and consolidation.

Doug Seacat: But I agree 100%. I don't want a lot. I don't want one big company. The co-ops are very used to no competition. They don't understand competition. I mean, we have changed and built and grown inside... DMEA has all the money that they need and we are still thriving. We have probably a larger employee base than they do and a larger territory. We have less customers, but they were able to build very fast because they had a lot of money up front and they have infrastructure already in place.

38:45

Doug Seacat: We will, over time, compete with them on a size level, but, and a service. And so, they only offer a certain set of services. They're not real flexible because they've never had to be and they offer power. That's what I do. It's 110, or whatever. The power is what... They've actually adjusted their plans to meet what we've done so that they can be competitive with us. And-

Casey Irving: Well, and that's a great, the school grant is a great analogy of that. I mean, we... Our biggest hurdle is, oftentimes, access to upfront funds. We need to go build out this area, but we don't have the funding just on hand to go build that out, whereas DMEA doesn't. And it puts us in two different situations where we decided to come up with a program that helps bring funding into us to go build out low-income areas that maybe are struggling with getting access to fiber internet, and it benefits the school district, and it benefits the student and teacher long-term, and they're just different mindsets, right.

Casey Irving: If I don't need that funding, I'm not going to develop that program. And it's kind of happened time and time again. When you're put in that situation, we're just developing, we're creating open access grants, whereas we see power providers are not because they don't have that need to. And I think that the local co-ops are great because it is a lot better than CenturyLink, right, but there's a different mindset there that I think we've noticed that it can be, we're very cautious of at this point because we do see the state and other people getting really excited about the local co-ops, too.

Casey Irving: And there's definitely some caution from our standpoint, of like, "Let's not end up in the same situation where we don't have an insurance policy." Most of our projects do have an insurance policy that we talk about. If I stop doing a great job in two, three years, eight years, and you need a different provider, you have that option. You have that ability to bring anyone in who's not going to have to over build right on top of us. They can just utilize the fiber that's in place. So-

Doug Seacat: DMEA will not sell to us. CenturyLink, at least I can go buy fiber to get to the next town, if I wanted to. DMEA has said no. And so, they'll have towers right next to DMEA fiber that we cannot use, and that fiber was built with co-op money and/or with grant money. So, we're not going to be that way, ever, and I think I 100% agree that we should not over build. And that does bug us, but at the same time, I mean, like right now, they gave grant funding to a Denver company to come build fiber in two communities that we already have fiber in. I obviously don't like that but at the same time, having some competition in those communities is probably good. I think we're awesome, so they don't need competition, but at the same time, some day, maybe we're not as cool as [crosstalk 00:41:18].

41:18

Casey Irving: And it's proven well. I mean, we're competing in those communities where we didn't get grant funds, we built it out ourselves, but the community likes us better, because maybe we're the local guys, or we answer the phone when they call and we say, "Hey, how can I help you? Can we fix your internet faster? Can we get your [inaudible 00:41:34] a little bit quicker?" So yeah, you start competing on those levels of service, versus just, "I can provide faster speed or I have fiber, and this guy doesn't." And definitely, the co-op mindset is, "I have power and this guy doesn't." [inaudible 00:41:49] of that spread into the internet side, as well.

Christopher Mitchell: As we wrap up, I just want to get a quick question, and Doug, which is, Doug, when you were making a comment about getting a little bit bigger, what is that scale? Is that 10,000 subs, 15,000 subs, 30,000 subs? Do you have a sense of where you sort of cross that line to hitting that efficiencies that you're looking for?

Doug Seacat: We have put a goal in our own business here to get, hook up 3,000 customers this year, which is a big task. I mean, that's a lot of customers, every single day. But we have more employees than we should because we are two companies. We're out there building fiber, as well, so that fiber building company needs employees. I really think that you can provide a pretty good service anymore, but not a tremendous amount of employees and that's really the cost. How many employees is it going to take to run a really good network? And fiber networks don't require a lot of maintenance. Our wireless does. We have about 72 towers, too, so we have a lot of wireless customers. And once you get into residential, whether it's fiber or wireless, residential customers have more wireless issues inside their home or iPad issues or virus issues, and that sort of thing.

43:04

Doug Seacat: And I definitely think it's more on the mix of if you're... We used to almost be 100% business, till now we're probably 50/50. When it was all business, we had very little customer support. Now that it's residential, and there's more customer support, I need more employees, so I need more customers. And my customers are a lower cost per customer, as well.

Doug Seacat: Anyway, so I believe if we can hit that 5,000 customer mark, that's where it starts becoming a little bit easier. We're already able to buy quality equipment. It's just, it is a little tough when a router is $20,000 or $30,000, for a router. That's a big chunk, and you need at least two of them, and in other areas, you need more of them. So, we're hoping that five to 10,000 customer is kind of going to be our sweet spot, and we'd like to go from there, too, but if we can hit that 5,000 then move from there, we're excited.

Christopher Mitchell: Well, I think you're going to hit it.

Casey Irving: I think the key for us has always been having the right people on board to make sure you can support, maintain, and grow. So, we have communities that want us to bring fiber internet access to their region, and in order for us to do that, I don't want to be the CenturyLink of that community where it's like, throw fiber in there and then if they call, I'm like, "Well, I don't know. Is there fiber near you? I just don't know that area."

Casey Irving: So, we want to have a good team that has the right information, that has the right people, and in order to have that team, in order to grow efficiently and to still be a solid internet provider that provides reliable service and great technical support or great billing support, it's just having a certain number of customers in order to maintain that staff, I think, for us.

44:43

Christopher Mitchell: This has been great. I mean, we've gone a little bit long, but I feel like there's a lot of really good details in here that we often don't hear about the reality from the ground. So, I really appreciate you guys taking the time today. Thank you, Doug. Thank you, Casey.

Doug Seacat: Thank you [crosstalk 00:44:55].

Casey Irving: No, thank you guys.

Doug Seacat: And thank you, Sean.

Sean Gonsalves: Thanks for having me at this time.

Ry Marcattilio-McCracken: That was Christopher and Sean talking with Doug Seacat and Casey Irving. 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 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 458 of the Community Broadband Bits podcast. Thanks for listening.

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