Transcript: Community Broadband Bits Episode 53

Thanks to Jeff Hoel for providing the transcript for the episode 53 of the Community Broadband Bits podcast with Mike Litterer on the muni fiber initiative in Waverly, Iowa. Listen to this episode here.

00:20:

Lisa Gonzalez:  Hello.  This is Lisa Gonzalez, from the Institute for Local Self-Reliance.  Welcome to another episode of our Community Broadband Bits Podcast.

This week, Chris takes us to Waverly, Iowa, to talk with Mike Litterer.  He's the Assistant General Manager of Waverly Light & Power.  Mike will soon be taking over as Interim General Manager.  Waverly is now looking into the possibility of building its own network.  In 2000, Waverly passed a referendum to establish a telecommunications utility.  The results of the referendum prompted incumbents to improve services.  Chris and Mike discuss why the community has waited so long on its telecommunications initiative, and what factors bring them to act today.

01:00:

Chris Mitchell:  Welcome to another Community Broadband Bits Podcast.  Today, we're talking with Mike Litterer, the Assistant General Manager down in Waverly, Iowa, a little bit south of where I am in Minnesota.  And he is the Assistant General Manager currently, will see soon be the Interim General Manager, in an exciting community in which a new municipal broadband network is on the horizon -- and has been for quite some time.  So, welcome to the show, Mike.

01:26:

Mike Litterer:  Thank you very much.

01:27:

Chris:  So, to start, Mike, can you tell us a little bit about Waverly?

01:30:

Mike:  Sure.  Waverly is a small-to-mid-sized community about 20 miles north of the Waterloo/Cedar Falls area in Iowa.  We are a population of just under 10,000.  And we have a pretty diverse business group here in Waverly.  Anything from the food industry to manufacturing to the insurance agency.  We have a small college in town, Wartburg College.  And really have just a diverse type of business in Waverly.  And we also do -- it's kind of a mix of rural and urban.  We do have quite a bit of farming community around us.

02:12:

Chris:  Actually, that answers a question for me, which is -- I was never familiar with where Wartburg was from.  I've seen them come up a number of times to play soccer teams in the metro area, Division III colleges.  And I had no idea that that was where they were from.

02:27:

Mike:  Yeah.  They're an excellent private school here, for this area, and provide a really good population for Waverly, of educated folks here.

02:37:

Chris:  Absolutely, I'm sure.  And you're right by Cedar Falls, which has its own reputation.  They've built a -- one of the early networks in Iowa.  And then, not long after that, I'm guessing, is when Waverly first started looking at the question of whether it wanted to invest in a network.

02:57:

Mike:  Yeah, we've looked at it three times before this.  And the last time we looked at it was in 2000.  And at that point, we actually had a referendum vote.  And that was passed -- there was actually two questions on the ballot.  The first one is, should we set up a telecommunications utility?  And that was voted 86 percent in favor.  And the other one was, should the Waverly Light & Power Board trustees be the governing -- governance for that new utility.  And that was also voted, I believe, 80 percent in favor.  So, that is kind of when we got started.

And right after that -- there were two other providers in town -- the telephone and Internet and cable TV.  And once we were approved, they upgraded all of their lines and equipment in town.  And, really, that accomplished what we set out to do -- what was to improve broadband telecommunications in Waverly.  So, we think we were successful at that point.  And that's when we decided -- you know, because they had made some major investments in Waverly that it wasn't as needed at that point in time.  So we did not move forward with setting up the utility.

04:14:

Chris:  And I think there was -- there's been a big wave of this.  It's not at all uncommon for this to happen in Iowa.  There's -- I think Iowa has a pretty good model law, in terms of -- it does require municipalities in Iowa to gain the permission of the population via a referendum, before you can build the network.  But once the town has voted, in a simple majority, then there is no further real barriers, or interference, in the right of a municipality to build a network.  Is that your read on it, as well, as someone who's down there thinking about it?

04:50:

Mike:  That is correct.  The only other thing we had to have done was, an ordinance had to be passed by the city council establishing the utility, which -- that was completed and published last week.  So, ...

05:02:

Chris:  OK.

05:03:

Mike:  ... we are officially a communications utility.  And we will have our first communications utility board meeting on July 2nd.  And we will be establishing -- that board will take the first steps in getting the utility moving.

05:21:

Chris:  OK.  So, in 2000, you gained the permission.  But at that same time, the existing companies decided to offer the services that you felt the community needed.  And then, if we fast-forward some, am I to understand, then, that these same companies -- or perhaps some consolidation form of those companies, because they often change names as the industry consolidates -- but, have they not been meeting the needs of Waverly anymore?

05:49:

Mike:  Yeah.  You know, since 2000, they really haven't made any improvements in the system.  And anybody that has been involved somewhat in broadband and in the IT world knows that the world has changed immensely since 2000.  And the needs of the people and the businesses have increased substantially.  And they're just not -- we don't feel they're meeting the needs of what the customers and the businesses in Waverly need right now.  So we think there's another opportunity, to come in and install the new system that can meet the needs of the community.

06:26:

Chris:  Do you hear directly from citizens or businesses, in terms of what they do need?

06:31:

Mike:  We do.  We hear, you know -- we've talked to all -- a lot of the big industries in town.  And a lot of them say, you know, their need for broadband are as much as doubling on a yearly rate.  Especially the educational institutes, Wartburg and our schools.  They said, you know, that the need and the use of high-speed broadband is increasing, you know, exponentially.  And so, they're looking for some new service providers to help them meet their need.  So that -- you know, and that is one of the reasons we started looking at it.  And as we started looking a little harder, we also decided that there's a definite need for that for economic development.  We have found that broadband is really the next big thing in economic development.  It is driving economic development across the country.  And unless we can get a better system than we've got right now, we feel like we can't keep up.  You know, if we want to continue bringing new businesses to Waverly, and grow, that we need to provide that service.  And we don't believe the incumbents in town are going to be able to do that.

07:34:

Chris:  So can you tell me, a little, what's driven you to that conclusion?  Are you having negotiations with new firms that might come to town?  Or are they just totally passing you over?  What exactly is happening?

07:45:

Mike:  Yeah.  We don't -- the city of Waverly -- Waverly Light & Power is a separate entity from the city.  We're owned by the city, but we're a separate entity.  We have our own board of trustees.  And we don't do economic development here at Waverly [Light & Power], but the city of Waverly does.  And those are things that we're hearing from them.  Our economic development director is actually one of the main people that is pushing for this.  He's hearing it from the people he's talking to.  You know, he's trying to bring new businesses to town, and that's one of the first things -- is, you know, what kind of broadband do you have in town?  And, you know, -- and, quite frankly, it's just not meeting the needs.  And we can't pull people in without upgrading our services.

08:26:

Chris:  So you're looking at serving everyone in the community, ultimately.  But, if I understand correctly, you do already have a ring that the Waverly Light & Power -- that you've built for your own needs -- is that right?  Like substations and the sort of things the utility needs to do?

08:40:

Mike:  That's correct.  In the early '90s, we installed a SCADA system, which is a "Supervisory Control And Data Acquisition."  And that basically talks to all of our substations and all of our generating plants here in town, and feeds us constant information on the status of our electric lines and our generation.  And in order to connect that, it was actually -- the best thing for us to do was to connect it with fiber.  You know, to use existing phone lines and things -- it just wasn't in good enough condition for us to use it in the way that we needed to use it.  So, at that point, we installed a fiber ring that connects all of our substations in town.  And that still exists today.  We use it heavily every day to monitor our system.  And from there, once we had that installed, we got requests from other members of the community -- from schools, banks, businesses who had multiple business sites in town -- that they wanted to connect their branches together over dark fiber.  So as we progressed through this, you know, we were able to help our other customers, and meet some of their needs with the fiber system.

09:50:

Chris:  Oh, so you actually have been providing dark fiber, then, already.

09:54:

Mike:  That is correct.  We do -- we do just dark fiber.  We don't provide any broadband.  It's just the pipe itself -- the dark fiber.

10:02:

Chris:  Right.  And for listeners who might not be as familiar, dark fiber is not considered a telecommunications service.  And so, typically, one does not have to get permission from anyone to provide it.  So you've already been serving the schools, and the libraries, and some dark fiber for the businesses.  Now you're looking to serve everyone.  Do you have a preferred model for how you're going to achieve that?

10:22:

Mike:  We are -- currently, we have a -- we're setting up a task force, for the communications utility, to decide what that model will look like.  And to make sure that, as we move forward, that it's a feasible business for us to be in.  So, I don't really have a picture of that at this point.  Because we're leaving our options open.  And we formed a -- the task force is actually formed of members of businesses and community members, for them to come in and tell us what the community needs.  Because this is the community's broadband service.  It's not Waverly Light & Power's.  It's there to serve them and serve their needs.  So we want them to come in and tell us what they think needs to be done.  And from there, we'll develop a business model and business plan on how to meet their needs.  But the goal is to serve everyone in town, not just businesses but also the residential customers.

11:12:

Chris:  Right.  And there's -- both Iowa and Illinois has a number of successful projects in which the utilities, obviously, have -- there's some in which the utilities themselves run the services entirely, and there's some in which a there's a trusted partner that is offering services.  So, there's that.  And I'm sure there's some other ways that you'll think about it.  So, do you have a time line for when you think connections will start being made?  Or a goal?

11:41:

Mike:  Well, we're hoping to have the task force and RFP and the feasibilities done -- the feasibility study completed -- by the end of the year.  And then, once that's done, we'd probably have to do a detailed engineering analysis and business plan.  So, hopefully, you know, within a year or so, we'll be ready to start moving forward and start hooking some customers up.

12:03:

Chris:  Great!  I'm hoping that you still have people that want to be on the Internet then.

12:08:

Mike:  You know, the way it's going, we'll have twice as many as we do today.

12:12:

Chris:  Yeah, I have no doubt.  I -- you know, I just look at my consumption now, and it's -- boy, it's incredible.  I just spent a few days away from an Internet connection, in rural Minnesota, and it was hard, for some of the things I wanted to accomplish.  It's just not possible.

12:29:

Mike:  Yeah.  And everything's just going to more and more broadband usage, whether it's IPTV, you know, or Netflix, or Hulu, or anything.  You know, those are becoming some pretty big users.  And they use a lot of broadband.  If you want to stream something like that to a HDTV, it takes a lot of service and broadband to make that work.  One of the other things that we could take advantage of is, we would like to have, from the electric utility's standpoint, a fiber connection to every home that allows us to install what's called "advanced metering infrastructure."  And we can actually get meter reads.  We can track outage statuses.  So if a meter's out of power, it will tell us immediately they're out of power.  Right now, we have to wait for a customer to call and tell us.  So, I mean, it gives us the potential to really cut down on our outage -- length of outages.  You know, if somebody's at work and out of power, a lot of times, we don't hear about it until they get home.

13:26:

Chris:  Right.

13:26:

Mike:  Well, we could have it back up and running in, you know, 30 minutes to an hour, if we know about it, before they even come home.  So, we can do auto- -- we can read meters without having to physically walk around and read them.  So there's a lot of advantages to that, too.  So, we feel that's another reason for us to be looking at and installing fiber-to-the-premise.

13:49:

Chris:  Right.  We actually just spoke with Clarksville, Tennessee.  And that's one of their major benefits, as well as remote applications -- being able to be more effective as a utility.  And we've also, in the past, spent a lot of time documenting Chattanooga's model, and the ways in which they've benefitted.  And they've been very clear: in the aftermath of horrible storms, you can be so much more efficient, because you're not wasting time trying to figure out where the outages are.  You have a much better sense, through the computers, of where the faults are and how to fix them.

14:24:

Mike:  Well, that's exactly right.  You know, we'll -- eventually we'll have a map, you know, that says, hey, just -- and we'll get a not that says this customer's out of power.  Maybe they text in, or their system will send us a text, or it'll light up on our computer with an alarm that says, hey, this customer's out of power, you need to go check it out.  You know, it just really increases our response time, and allows us to serve our customers better.

14:47:

Chris:  Great!  Well, we're looking forward to seeing what model you move forward with, and seeing how the project turns out.  But you're certainly in good company.  Iowa has more of these than, I think, any other state at this point.

14:58:

Mike:  Yeah.  We have some really great models to follow, too.  You know, the average take rate for municipal utilities with telecommunications is 60-80 percent in Iowa.  And, you know, every community that has done it has been successful.  So, we have some really good models to follow.  So we'll rely on those communities to help us along the way, and to tell us, you know, these are things you should be doing, or these are things you probably shouldn't be doing.  You know, to help us make sure we're successful.

15:29:

Chris:  Well, thanks for coming on, and telling us about the project.  And we'll look forward to hearing more about it as you move forward.

15:34:

Mike:  All right.  Thanks, Christopher.

15:36:

Lisa:  You can get more details about the project by following the "Waverly" tag on muninetworks.org .  We wrote about the community, and will continue to follow their progress.

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 July 2nd, 2013.  Thank you again to the group Eat at Joes for their self-titled song, licensed using Creative Commons.  Thanks for listening.