Transcript: Community Broadband Bits Episode 46

Thanks to Jeff Hoel for providing the transcript for the episode 46 of the Community Broadband Bits podcast with Paul Belk on North Georgia Network and its impact on the economony. Listen to this episode here.

 

00:13:

Lisa Gonzalez:  Hello.  This is the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance.  And I'm Lisa Gonzalez.

This week, Christopher Mitchell talks with Paul Belk, CEO of the North Georgia Network.  The project, looping through the northern region of the state, serves governments, schools, libraries, local businesses, and hospitals.  The network was also instrumental in attracting a new data center to Lumpkin County recently.  Community leaders hope to transform the region into a new southern tech hub.  Paul and Chris discuss some of the unique characteristics of this early BTOP project, and they revisit how the network is breathing new life into an area that was struggling in a changing economy.

00:51:

Chris Mitchell:  Welcome to another episode of the Community Broadband Bits Podcast.  Today, we're going to head down into an area of the country -- it's a bit warmer than where I am right now in St. Paul, Minnesota.  We're going to talk to Paul Belk, the CEO and President of the North Georgia Network.  Welcome to the show.

01:08:

Paul Belk:  Thank you, sir.  I appreciate it.  Thank you for having me.

01:10:

Chris:  Absolutely.  It's exciting to have the recipient of the first BTOP award -- the Broadband Technology Opportunities Program, one of the two stimulus programs that came out of the federal stimulus projects.  So, thank you for joining us.  And, can you start by describing a little bit of this area?

01:33:

Paul:  Yes.  The North Georgia Network, its territory, or at least the geography that it covers -- it is, of course, north of Atlanta.  But there are several counties that are key indicators of where we're at.  Forsyth County is a county that's just north of the city.  But after that, it becomes fairly rural, into Dawson County.  The network was built in the downtown Atlanta, through Dawson County, into Lumpkin County, which is further north into the state.  Then it moves eastward, towards White County and Habersham County.  It then turns north, goes over the Appalachian Trail into Towns County, which serves both Hiawassee and Young Harris, Georgia, and continues in a loop through the state back westward into Union County.  And then turns due south, through what would be Fannin and Pickens Counties, back into the metro Atlanta area, creating a 250-mile loop.

02:38:

Chris:  So, how many counties area actually served by it?

02:41:

Paul:  There are actually over eight counties that are served.  There are actually more now, because we have expanded since our -- we finished the project.  So, we've actually expanded in to some additional counties.

02:54:

Chris:  OK.  So, let's dig back into a little bit beforehand.  Can you tell me what was happening in these counties, in the area, before you even -- before there was a stimulus program, before there was an opportunity to apply for this?  We often find that there's some interesting work that's already been done.

03:13:

Paul:  Yes.  You know, this really came about as a true economic development project.  As a matter of fact, the North Georgia Network -- the project, if you will -- was kicked off -- really, its genesis was the Lumpkin County Development Authority.  And the director of that authority was Bruce Abraham.  And, at the time, Bruce was charged with bringing in businesses.  And rather than bringing in businesses for the authority, he was losing them.  And so, during his interviews with industry that came to the area, there were obviously some things that prevented them from locating.  But one thing that came up over and over again was that you have no broadband.  So Bruce, and his instinct, went to the incumbent provider and said, look, these industries are saying we have no broadband.  And they, of course, said, well, yes, you do.  And that was that.

So, basically, what happened was is that this development authority partnered with other counties -- which were joint development authorities, if you will -- they refer to them as JDAs -- and these JDAs then partnered with some local electric coops that were already stringing fiber, for their internal purposes and some for some commercial use.  And so, really, it was just really a perfect blend of interest groups that under other circumstances probably couldn't work with each other.  But it just -- it worked out very well, because the timing for the stimulus project was right at hand.  And they applied for the stimulus dollars, and were awarded.  But, prior to that, in 2007, they did a study of the area -- they spent about $100,000 doing a study.  And that study indicated that the region was not good for farming, it was not good for manufacturing, but what it WAS good for was the burgeoning tech sector that was moving northward from Atlanta.  So, that -- again, it was some very key component parts that worked out, for the ** to be awarded.

05:43:

Chris:  And if I remember correctly, I think I've seen Bruce Abraham go a little bit further in talking about his interactions with some of those firms that did not locate there originally, where he said, well, we do have DSL, and the response was, that's not broadband.

05:59:

Paul:  Exactly.  That's exactly what they said.  They said DSL is NOT broadband.  DSL is, really, you know, it's an accent to what they considered to be broadband.  And, more importantly, it's not that industry, you know, simply denied that DSL was broadband, but, typically, if -- industries, when they come and they evaluate an area, and they see that there's no infrastructure -- well, what's key is, they need to really insure that they have infrastructure for their employees working when they go home.  If there's not, you know, a decent uplink to the Internet, they can't have a really well-prepared workforce that has access to decent broadband.  And we've seen that time and time again.  Industries want an educated workforce.  And one of those -- it's just kind of instrumental in that is you have decent broadband.

07:00:

Chris:  I think that's especially true if you're going after a high-tech workforce.  I mean, these are men and women who are going to want to finish their jobs, and they're probably going to want to go home and play video games and do other high-tech things.

07:12:

Paul:  There's a very blurry line between business and work nowadays, because we're in such a 24/7 environment.  And a global economy where work gets done at -- it's at the discretion of the user.  And as long as that user's being productive.  And then, of course, the employer determines whether or not their productivity is where it should be.  But, at the end of the day, that's the thing -- is that they can work at home -- and sometimes from the hours of 11 p.m. to 3 a.m.  And that very well may be their window.  But if they don't have proper access, or if there's continual infrastructure issues, that's just not possible.

07:56:

Chris:  Right.  And I have to confess, I am actually recording this from my home office, where I work on a periodic basis, depending on whether I want to be productive at work or be productive at home.  Sometimes, the distractions are equal at both.  So, I fully sympathize with that.

One of the things that I mentioned at the top was that you were the first BTOP award.  And I think it's important to just push into this a little bit, because I remember reading on the occasional newspaper story about some of these north Georgia counties.  And you really were a shovel-ready project, from what I can tell.  This is a project that the stimulus really helped you to get it done faster.  But I think this is the kind of thing where you guys were going to do something eventually.  Am I reading that right?

08:43:

Paul:  Yes.  One of the -- you know, those dollars were available or not, we indeed were a shovel-ready project, in the sense that you had the political will, and you also had infrastructure -- key components being with the electric coops -- you know, they have the trucks, they have the skilled workers, they run lines, they have logistical attributes, of course.  So, yes, in that regard, it was indeed a shovel-ready project.

09:16:

Chris:  Now, the project is officially the -- is finished, in terms of what you set out to do as a part of the BTOP award.  And I'd like to get into, a little bit later, the expansion, where you're starting to find ways of leveraging that to further and connect to other people.  But first, let's talk about some of the benefits of the project that's already been finished.  Can you tell me a little bit about how that's impact the area's schools?

09:45:

Paul:  Well, I tell you, that's been one of our most dramatic impacts, as far as any vertical, if you want to call it that -- than any other.  What we have been able to do -- the schools.  We have a number of schools, and I'll just rattle off a few:  Dawson, Lumpkin, White, Habersham, Towns, Rabun, Union, Hart County.  They are all now participating in a big 10-gigabit cloud that we basically collapsed them into, so that they can share resources across this virtual medium, you know.  It's just a big network, where they can take electronic assets that one school may have, that another does not, and leverage that asset.  And it really -- it lowers operating costs -- at least capital costs, in a lot of cases.  Because they are now able to share those resources.  So that's been a big deal.  And in addition to that, our offering to them -- the package that we gave them -- was 1-gigabit to the Internet, which --  You know, before, a lot of the behavior that a lot of the IT professionals that work for the schools exhibited was dictated based on what they could NOT do, rather than what they COULD do.  And -- so we're seeing them kind of manifest, in a lot of different ways, in using this network, to try all kinds of stuff.  We see that they're really working with the folks that are developing curriculum, and that puts them into positions where they can take, let's say, a teacher from one school system that would be considered an all-star in math, and that one particular all-star in math can then be broadcast into other counties, into other systems, and, you know, and give other systems even that much more value-added benefit from that particular, you know, intellectual property.  So, we're seeing a lot of different things happen, using this -- you know, the type of bandwidth they're able to utilize.

12:02:

Chris:  I think that it's important to recognize that there's two distinct benefits from your network.  One is the obvious faster connection to the Internet that allows them to go out and get it to any resource in the world.  But the other is too often overlooked, I think, which is the super-fast connection between local facilities.  That really helps you drive budgets down.  The fact that they can trust the North Georgia Network to be able to keep those connections affordable, moving forward, means they can make these shared investments.  The way that you can have the local collaboration, I think, is really important, because you have the super-fast connections between school districts that are just ten, twenty, maybe even 100 miles, I'm guessing, apart.  Right?

12:46:

Paul:  Yes.  Yeah, it's a really key -- I think you pointed out two distinct things.  And there is, of course, a third.  But, you know, the two things, absolutely -- Yes, getting out to the outside world, that's critical, because of all of the, you know, content that resides outside of, you know, their immediate local or wide-area networks.  But also, it is -- this whole idea of having an inter-district, or inter-school-system wide-area network, in my mind -- or, at least, testimony that I saw -- did not exist.  Typically, schools systems are -- they're really managed as their own cost centers.  And they're on their own.  And so, the budgets are cut.  They could never take into consideration, well, maybe if we share these costs with another school system, we would actually have a chance to hang onto a resource.  But that was just never an option.

And then, of course, the third impact, that you didn't mention, is -- just by our position in the market, our proximity to, you know, the local incumbent, it has driven down prices for all of the market at large, across the whole footprint.  So we, you know, would really like to analyze what the -- you know, the total impact of just our -- our position in the market.  So, it's just a benefit from us being here.  It's driven down prices, and really put the incumbent in a more ready position to give them better prices.

14:25:

Chris:  Right.  We've seen where, in some cases, a local school district, or even university, suddenly will be told that their broadband bill is going to be doubled overnight.  And that's simply because there's only one firm that's nearby -- close to serve them.  And that firm has decided to take advantage.  And so, just by being there, you change the entire dynamic, and force, I think, a more honest price for these services.  So, I definitely see that.  We've seen that in a number of other places.

But I think one of the things that we started off by talking about with the North Georgia Network was the need for better economic development results, and attracting new jobs to the region.  And I think, from what we've seen, you don't often see big changes in the first year or two.  But I'm curious what you can tell us in terms of how the North Georgia Network is changing the equation for jobs.

15:21:

Paul:  Well, the equation is really -- it changes, in the sense that no one's going to do a drive-by of your economy unless -- you know, especially if it's, you know, an organization that requires some element of redundancy, especially in data infrastructure.  So, you won't even get a first pass if there's not two providers.  For some industries.  Some industries, that's a prerequisite, before they even, you know, give it a shot, they need to make sure that that exists.  So, we have just -- and I think you're right.  I think it's a little bit naïve to think that there's going to be this dramatic infusion of industry that comes to your area.  We have not seen that.  But what have seen is a -- the rate at which the inquiries are coming in to our economic developers are increasing dramatically.  And, I won't say that we haven't been without victory.  We have.  We've actually landed our first data center.  And, really, we haven't been operational -- we've been operational for less than a year.  But we've landed our first data center, in Lumpkin County, where this started.  It will be an $80 million investment.  The initial investment will be about $10 million.  But it will basically be -- it will offer up to the local economy salaries in upwards to $100,000, where the average payroll -- at least rate of pay in the area -- was $10 an hour. So, while you won't employ 60 people, you'll have ten people that will equal the same tax base.  So it really starts to change the whole dynamic of, you know, earnings potential for your local folks.

17:15:

Chris:  So, I'm curious about the expansion that you had talked about.  Some of the existing loop that was built and is finished -- you're seeing some interest from nearby places that, I presume, also want to have -- attract some of their own economic development.  And they want to connect some of the schools and that sort of thing.

17:32:

Paul:  We had four counties to the east of us that saw what was going on in our area.  And they chose to leverage some grant dollars, and some local match and others, to expand the infrastructure into their area.  We had enough electronics so that we could create another lateral into those communities.  And so, you know, we come alongside them, and they've gone -- you know, they've worked closely with the state of Georgia and other entities to help us expand the network.  So it's worked out very good.  We're still underway with that project.  But what it's enabled us to do is, again -- you know, industry would not really take a look at some of these areas without this sense of redundancy in infrastructure.  And when we start looking at broadband as a utility, they definitely want that option to choose.  So, it's been a good process.

18:37:

Chris:  And are you still fielding queries from others who are hoping to see other expansions?

18:42:

Paul:  We're really, as a region -- we have other areas that we would be interested in moving into, just from, you know, a sense of wholeness.  Because we are the northeast Georgia region.  And there are parts that we would like to collapse some rings and -- So, there are some areas that would like to see us come there.  But, you know, in terms of timing and scale and -- at some point, you know, we've been on such a rollercoaster of build-out, we really need to pay attention and get a lot of our distribution well underway -- and, as I'll put it, do well at home, and getting a lot of our customers hooked up.  So, even, you know, post-grant, we have had a lot of activity, of folks wanting us to hook them up.  And so, we've had to go back to the drawing board and come up with new strategies for expansion.  That is one key, that I think that a lot of projects don't consider, is, how will you continue to raise capital, after, you know, the grant is over with.  And so, we've been going through a couple different rounds of that.

20:01:

Chris:  All right.  Well, are there any final closing comments you'd like to offer?

20:05:

Paul:  No.  You know, I really appreciate the time.  And I'd just encourage all those projects that are still underway to -- you know, to keep a steady course, and go pick up your core anchor institutions.  Because I think those are really key to having a healthy base of revenue.  And also good support.  So, again, we really appreciate your time, Christopher, and your support of the North Georgia Network.

20:34:

Chris:  All right.  Thank you so much.

20:36:

Lisa:  That was Paul Belk, CEO of North Georgia Network, visiting with Christopher.  For more detail on the network, including maps and community partners, check out northgeorgianetwork.com .

Send us your questions and comments.  You can e-mail us at podcast@muninetworks.org .  Our handle on Twitter is @communitynets .  This show was released on May 14th, 2013.  Thank you to Mount Carmel for their song, "Oh Louisa/Slow Blues," licensed using Creative Commons.  Thanks for listening.

Tags: