Transcript: Community Broadband Bits Episode 51

Thanks to Jeff Hoel for providing the transcript for the episode 51 of the Community Broadband Bits podcast with Christie Batts of Clarksville's municipal fiber network in Tennessee. Listen to this episode here.

 

00:21:

Lisa Gonzalez:  Thank you for joining us for another Community Broadband Bits Podcast, from the Institute for Local Self-Reliance.  This is Lisa Gonzalez.

This time, we reach out to another gigabit community: Clarksville, Tennessee.  CDE Lightband joined the growing list of municipal networks who offer 1-gig service this spring.  And it's even taken on a residential 1-gig user.  Chris talks with Christie Batts, Broadband Division Manager, who provided info about benefits to the community and challenges the network faced along the way.  This community, filled with military personnel and college students, faces some unique circumstances that influence the network and the utility.  Here's Chris, visiting with Christie Batts from CDE Lightband.

01:01:

Chris Mitchell:  Welcome to another episode of Community Broadband Bits.  Today, we're talking with Christie Batts, the Broadband Division Manager at the Clarksville Department of Electricity, in Tennessee.  We're going to be dealing with folks in the central time zone of Tennessee, as opposed to an Eastern Time zone.  In the past, we've talked with folks from Chattanooga, from Bristol, and from Morristown.  So, welcome to this show, Christie.

01:29:

Christie Batts:  Thank you.  I'm glad to be here.

01:31:

Chris:  I'm excited to talk to you, too.  The service is called Lightband.  And I've just -- poking around a little bit, I saw that you had a referendum all the way back in 2006.  You've had to deal with Charter and AT&T in your community for a long time.  And the thing that I was just really excited about was learning that you were one of the first networks to do symmetrical services.  Right out of the gate, you started with 10-megabit symmetrical.  And I just want to commend you for that, because I think that doing symmetrical services is one of the best parts of these networks.  So, thank you for that.  And then, the last thing I wanted to make sure people knew was that you're a gigabit community.  And I'm sure we're going to talk about that a little bit later in the interview.

But, to start, I'd like to know a little bit more about Clarksville.  Tell us more about it -- how it's unique.

02:23:

Christie:  OK.  Well, Clarksville is on -- to give kind of everyone a geographical reference -- we're in the northern part of the state, right on the Tennessee-Kentucky border, just north of Nashville.  We are the fifth-largest city in the state, and one of the fastest-growing counties in the nation.  We're home to Fort Campbell, Kentucky.  It's Kentucky because the post office sits on the Kentucky side of the border.  But 85 percent of the land mass and about 85 percent of the personnel assigned to Fort Campbell live and reside on the Tennessee side, within our community.  We're also home to Austin Peay State University.  And it's a -- about a 10,000-student liberal arts university -- state college -- here.  And -- so it gives us an interesting dynamic in the community, when you look at a relatively young population.  Very tech-savvy, with the university students and the military personnel.  But it also gives you a market that has a great deal of churn built into it, as well, because you kind of -- constant influx of new people coming in, but also a large number of people moving out of the community on a -- any given timeframe.

03:37:

Chris:  For those listeners who aren't quite familiar with the term "churn," I think, you, the main with a high churn rate is that the cost of going out and connecting and disconnecting is pretty high.  And an ideal situation for a telecommunications network is, you have a whole lot of people that buy homes and stay there for 20 years, and take services the whole time, right?

4:00:

Christie:  That's correct.  That's correct.  Unfortunately, that's not something that we're accustomed to dealing with.  And, as we are part of the municipal power company, as well, it was something that the organization was used to dealing with on the electric side.  And that kind of lends into why we built the network in the first place.  The reason why we actually originally entered into -- the power side of the business -- entered into building this fiber network was, with that constant influx and outflux of people in the market, it makes it a lot easier for you if you have a connection of fiber-to-the-home that you can remotely connect and disconnect the services.  Therefore you're not rolling trucks out, to disconnect someone, or reconnect the next tenant moving into the home.  So that was a huge piece for us.  Plus, also, being able to remotely read those meters dramatically cuts down on the cost of managing the services for the electric delivery -- the services and the billing costs and the things that are associated with that.

05:02:

Chris:  Right.  Because I'm guessing -- I mean, ordinarily, you read a meter once a month.  But if you have people moving out in the middle of the month, or at the end -- you know, I mean, at the beginning -- it's just -- you want to get those -- you don't have to send people out on specific missions to read the meters.

05:16:

Christie:  Correct.  I mean, for example, in the apartment, you've got those folks moving in and out, you could possibly read that same meter at least three times: one for the normal billing, one with the tenant moving out, and then again when the new tenant comes in.  So that he -- they know when their billing -- the previous tenant's billing stops and the other one started.  And it can be very expensive.

05:38:

Chris:  Right.  So, you've been around for a long time.  And I think you've had slightly more growing pains than the average utility.  In part because of these trends, I'm sure.  But can you tell us a little bit about some of the difficulties that the utility's faced and overcome?

05:56:

Christie:  Sure.  You know, it's kind of an interesting thing.  You applauded us, initially, for building an active Ethernet system, which allows us to be fully symmetrical.  That means there's a fiber to every premise that we provide services to, whether to just do the meter interface or to provide the broadband services.  It's an expensive proposition, but it is one that gives you the best flexibility as the network grows and you're able to grow to meet the consumer demands and not have to completely overhaul the system at some point.  But it also provides a lot of challenges, because at the time that we built that type of network, there were very few companies that we could partner with that had the type of technology to blend into the network.  We had some challenges.  We had some missteps with some of the choices we made initially, and how we were going to manage the system, how we were going to deliver the services when we went into the broadband business.  And it really hindered our growth a great deal, in that, when we first launched our broadband services, which was in January of 2008, at that time, we really went out with a service that was a really, really strong Internet product.  As you mentioned, 10-megabits symmetrical.  At that point, 2008, no one was doing that.  So we had a really good, strong broadband service.  But our video service, at the time, was not originally developed to handle HD product.  Had a very limited channel lineup.  We had lots of issues with our middleware.  Our set-tops.  All of those challenges that can rally hinder the growth of a product.  So, the first, probably, 18 months of our existence, we were really truly almost just an Internet provider.  We went in and kind of retooled everything on the video side.  We were able to find a partner that would work with us on the phone provider side, so that we could be a retailer for a wholesale phone company.  And were able to begin to build a true triple-play service.  But, like I said, the first 18 months, we didn't have all of those pieces -- parts -- into place, and it really took a complete retooling of the system to get us there.

08:13:

Chris:  Right.  And I think you had two things going against you.  You had a change in the technology, right?  But then you also had your size.  And while there was some others that were doing this sort of thing, none of them were anywhere near as big as you.  You know, Lafayette is similar in size.  And the two of you, I think, were sort of going back and forth as the largest municipal fiber networks in the nation, until Chattanooga came on-line, several years later, and took the thunder away from both of you.

08:42:

Christie:  Yes.  They did.  Well -- and, you know, in context, the electric division, it's the 51st-largest municipal public power provider in the nation.  And we're the 2nd-largest power provider in the middle Tennessee area, next to Nashville.  So, size-wise, we actually had a great deal of challenges there as well.  In that we were big in some respects, but also not quite big enough -- say, for example, as a Chattanooga -- to get the emphasis we may need from other providers and partners to really come in and help us build through this system and get it -- get past some of these challenges.

09:25:

Chris:  Right.  And it's frustrating, I'm sure, that you've been able to work out solutions that every other network that comes after you benefits from.  But no one's ever going to cut you a check to help you out for those months that you had to learn those lessons.

09:41:

Christie:  No.  No, they're not.  But, you know what, it was a challenge that the team that came in, to kind of do the clean-up part of it -- myself and some others in the group that all worked together on it, and some really brilliant engineering staff that I have -- really worked very hard and close together.  Today, it's something we can take a look back at -- what we accomplished in a short time, relatively, when you think about it.  Overall, that the things that we've accomplished, we can look back at that and be really, really proud, because of the way we've been able to make the system work, and turn it around.

10:19:

Chris:  And so, what we can say, then, is that you -- the network was launched, you had a number of initial problems, you had a significant management change, and now you're on target to meet all your obligations and pay down your debt.  Is that a fair assessment?

10:34:

Christie:  That is a very fair assessment, yes.  We actually continue to grow exponentially each year.  Have done tremendous on our growth numbers.  We've been cash-flow neutral for several months, and now we're getting into the stages of being cash-flow positive, where we can begin to pay down our debt.

10:54:

Chris:  Right.  Because, as I understand it, you've been paying the interest on your debt.  The network has not been subsidized.  You've just been having to push out the break-even point further down the road.

11:05:

Christie:  Correct.  And by not being subsidized -- because, so everyone understands -- we are part of the municipal power company.  Each entity has to operate separately.  Each entity has to stand on its own.  We can borrow money from the electric division, but we have to pay it back and thus pay interest on it as well.  And then, any services that we share -- accounting services, payroll services, human resources -- all of those things that organizations have to have that we don't actually engage in ourselves, but we share part of that staffing with the electric division -- we have to pay those back, in cost allocation and in dollars back to the electric division.  And we've been providing about $4.2 million back to the electric division for the last two years.

11:49:

Chris:  Right.  And that's pretty scrupulously accounted for, from TVA, from what I understand.  They take this very seriously.

11:56:

Christie:  They do take it very seriously.  And it is very scrupulously accounted for.  And it actually sometimes becomes almost, you know, to the point where we say, can you actually use that well, or can you use that?  It's kind of fun to kind of interact with accounting sometimes over how detailed it can be.

12:14:

Chris:  So, I want to turn the conversation a little bit to some of the benefits that we're seeing from the network.  As you just noted, the electric ratepayers see a benefit because some of the shared infrastructure that they would need anyway, now, some of those costs are allocated to the telecom.  I saw a recent announcement that you have a local weather channel that most other communities don't have.  And I just found that to be interesting.  It's probably one of the lesser benefits, but I was wondering if you could tell us a little bit about that?

12:44:

Christie:  It's interesting.  In some communities, I don't know about all, but particularly in this community, and a lot of other communities I've worked in, local weather information is probably one of the single most important things for people.  It's really strange that they get so focused on it.  It's got to be local.  I want to see what's happening right here in my back yard.  And so we've been able to work with a company to develop a local weather channel specifically for ourselves.  And that's, I think, going to be a huge benefit for the community.  It's a really nice thing to do, that helps continue to put the stamp on what we're able to deliver as part of this benefit of building this network.

13:23:

Chris:  OK.  And can you tell us about some of the other benefits?  I'd just -- we're always interested in how -- you know, you build the network for specific reasons, and sometimes you have benefits you don't expect, and sometimes you have the ones you do expect.  So why don't you share some of the benefits that you've seen from the network.

13:42:

Christie:  On the electric side, one of the key benefits we've seen, obviously -- we've talked about the cost savings related to having this meter interface through the fiber, is that -- On average, about 60 percent of our customers are fully connected with fiber OR with a wireless radio-read meter.  And we're continuing to build on that each month.  But even at 60 percent, we're seeing, on average, about $45,000 a month in savings and costs to interact with those meters, by using it through the -- by delivering that service through the fiber.  So that's huge for the electric ratepayer as well.  That helps keep that cost down for those folks, that even don't even -- for the ratepayers that maybe don't even choose to use the broadband services.

On the broadband side of the business, we've done a lot of interesting things that we've been able to partner with.  We're the primary source for Internet services and point-to-point connections and bandwidth for the City of Clarksville.  So, our city government offices are all connected via our fiber.  And so they've been able to develop some real benefit -- interdepartmental benefits that have been huge for them, and a real cost savings for the city as well.

We just recently rolled out our first city park, in a partnership with the Parks & Recreation Department, to provide our first city park with wireless connectivity.  Which is great in a community that has a student population.  How nice is it to go, on a great day, when it's really sunny, and go to a park that's probably maybe four or five blocks from the university, sit down and be able to do some studying and some work in a wireless environment?

15:31:

Chris:  It's always wonderful.  I mean, I think there's an expectation now that you're going to have connectivity anywhere.  And, while you can use your mobile phone out in those areas, boy, you go through those data plans pretty quickly.  So, having the free Wi-Fi, which is going to be faster, and -- it's just -- it's terrific.  Now, I also understand that there's some crime cameras that are being -- that are using the fiber.

15:54:

Christie:  Yes.  We have -- some of the parks have cameras in there.  They've been proven to be a nice deterrent.  A subtle but effective deterrent system -- crimes in some of our parks that we've seen.  Nothing -- you know, nothing major, but maybe some vandalism.  And, you know, tampering with vehicles that are parked there, and that sort of thing.  But, you know, it's nice to be able to have that, and have that posted, so that folks understand that if they do do something in a park that they shouldn't be doing, it may very well be captured ...

16:24:

Chris:  Um hum.

16:24:

Christie:  ... on camera.

16:26:

Chris:  And earlier, when you were saying about the benefits to the local government, I'm curious, how are the schools doing?

16:32:

Christie:  We've done a few projects with the schools.  We're not their sole provider.  And one of our challenges in this market -- probably that some of the other communities don't face -- is that we are only allowed, based on Tennessee state law, to operate within our service territory.  And, of the -- I think it's -- 32 schools in the school system, there are several of our schools -- I think it's up to ten now -- that sit outside of our service territory.  So they have to use a multitude of different providers ...

17:01:

Chris:  OK.

17:01:

Christie:  ... but we have been able to develop some projects with some local entities in conjunction with the school system.  For example, one of the local banks actually has a class that they teach within the high schools about money management, and managing your checking account, and doing those sorts of things.  And they are able to connect back to their main branches through our fiber, and get a better service for that educational experience.  Since we are, like I said, locked, with the city only being able to operate within our service territory, we do -- City of Clarksville is also the only city in -- the county seat of Montgomery County.  We also have the same great relationship with the county, as being their point-to-point provider and their Internet service provider, so that they have connectivity within their buildings within the city.  So, their 9-1-1 center, our police department, sheriff's department, the jail, the court system are all connected, and they're able to transmit data and information via the same network and point-to-point services that we're able to provide for them.  So that saves the county, as well, a great deal of money.

18:15:

Chris:  Another benefit is, you're one of ten communities somewhere around there that has gigabit to every citizen in the community, and to any business, that wants it.  You've made the price far more affordable than it is in just about any other city in the United States.  Have you seen any resulting changes from that?

18:35:

Christie:  We're still relatively new in the game on that.  We've had some successes with the residential side.  And had some customers that have subscribed to the gigabit services on the residential side.  Again, back to a university town and a military town.  And the one gentlemen that I interacted with, in particular -- I, you know -- I said, you know, just curious, but a gigabit of service is pretty significant for a resident, and I was kind of curious, was he going to be running a home-based business out of it.  You know, that sort of thing.  And he said, yeah -- he said --  He was military.  He had served multiple tours in Iraq and Afghanistan.  And when he was stateside, he really spent a lot of time gaming.  It was kind of his downtime.  And he wanted to be the A-1 number-one premier gamer ...

19:20:

Chris:  Right.

19:20:

Christie:  ... in his cluster of folks.  And so, you know, more power to him!  Great!  We're -- you know, one of the interesting things that has come out of this is, that I've learned a lot more about what gaming's about.

On the commercial side, we've had -- made some significant inroads.  We've not gotten that gig commercial customer just yet, because it's a bit of a jump.  But we do have services at -- not just the 10-meg any longer -- the 20, 30, 50, and 100-meg.  And we've got some customers on the commercial side that are enjoying those levels of services.  Architectural firms.  They're using them to transmit their design work.  We also have -- you know, one intriguing little scenario is, one of our larger churches in the community does about four services each Sunday.  And they do a podcast of those four services every Sunday.  And it's all different types of services -- one more traditional, one a little more contemporary.  And they use our 50-meg Internet to be able to upload that information to their website and make it available to shut-ins and that are outside of the community, that can't come in to attend the services.

20:36:

Chris:  I've heard -- I mean, I've certainly heard some talking about that, but I hadn't heard of churches specifically doing it.  Especially to that level -- of having four in one day.  That's impressive.

20:47:

Christie:  Yeah.  Yeah, it's a pretty impressive church, and what they're able to turn around in a Sunday.

20:51:

Chris:  I do want to ask you one other piece about your background.  I saw that you had experience working for Charter.  And they you were at the Chamber of Commerce, before coming over.  And I'm curious if you have any advice for people who are in a community where the Chamber of Commerce is very skeptical about a city-owned network.  We've seen that in many places.  And so, I'm just curious if you could share a little bit, with your experience while being at the Chamber.  And then any advice for people that might have a different Chamber that views things differently.

21:22:

Christie:  It's an interesting approach that we've taken with our Chamber.  Now, it probably benefits that I know where the Chamber of Commerce leadership comes from in a lot of cases.  You've got a lot of business people that make up the volunteer leaderships of most Chambers.  The board of directors, and the committee chairs, and that sort of thing.  And when you get business people together, and when you start talking about a government entity, or a municipal entity, getting involved in what is a traditionally competitive business, it makes those folks a little be nervous.

21:53:

Chris:  Right.

21:53:

Christie:  And so, it's kind of an interesting dynamic that you have to deal with.  We've got a really, really progressive Chamber, and a really progressive economic development group here.  And they have to walk a fine line, because, obviously, our competitors are members of their Chamber of Commerce, and contributors to their programs and campaigns.  And so they've got to walk a fine line in where they show their support.  But at the end of the day, the message that's the key most important thing for communities to remember is that any type of growth in the community -- any type of competition in the community, whether it's driven from a municipal or another private provider coming into the community -- it's always good for the community.  Because it gives the citizens a choice.  It provides additional resources into the community.  So, instead of -- I mean, it's a core basic level.  Instead of having three Internet service providers in a community, maybe there's four.  And that fourth one can come to the table with other offerings that can benefit the local businesses and the like.  So, competition at any given point is the core basis of what's important for economic growth and development in the community.  The other piece of that, too, is to deliver the message to the economic development side and to the Chamber leadership side that, as a municipal provider, we're going to keep -- the regulations are often so strict that we are actually competing at, sometimes, a disadvantage than the business side.  But we're also a local entity that has a stronger stake in the community.  We are providing jobs within the community.  Our call centers are, you know, all locally staffed.  Our installation staff and our field personnel is all local folks.  And those are all tax dollars right back into the community.

23:46:

Chris:  Um hum.

23:46:

Christie:  And jobs for the community.  So that's the kind of message that you have to deliver back to them, so that they understand.  While, yes, the competitors are out there, and they're hiring some local people, a lot of times, those dollars that they profit from don't stay within the community.  Our dollars will stay within the community, back into infrastructure for the system and improvements into the system.  And in tax dollars into the system, as well.

24:13:

Chris:  Well, thank you so much for coming on this show.  It's really great to learn what's happening in Clarksville.  Tennessee is just an exciting place to be right now, with more gigabit cities than any other state.  Thank you so much for coming on this show and sharing your experiences in Clarksville.

24:30:

Christie:  Right.  Thank you so much for having me.

24:32:

Lisa:  For more about CDE Lightband, visit clarksvillede.com .  We also provide more resources on the network at muninetworks.org .  Our coverage goes back to 2009.

Please send us your questions and comments.  E-mail us at podcast@muninetworks.org .  Our handle on Twitter is @communitynets .  This show was released on June 18th, 2013.  Thank you to the group Eat at Joes for their self-titled song, licensed using Creative Commons.  Thanks for listening.

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