Transcript: Community Broadband Bits Episode 90

Thanks to Jeff Hoel for providing the transcript for the episode 90 of the Community Broadband Bits podcast with Jory Wolf on the fiber approach in Santa Monica, California. Listen to this episode here.

00:10:

Jory Wolf:  We knew what it was like not to own this asset.  We knew what it was like to lease it from others.  And it became clear to us that this was something that we weren't going to bleed through the nose on.  We were actually going to own it.

00:24:

Lisa Gonzalez:  Hello there.  You are listening to the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance.  And this is Lisa Gonzalez.

Today, Chris visits with Jory Wolf, Chief Information Officer for the City of Santa Monica.  We just released a report on City Net, Santa Monica's awesome fiber network.  The network now serves businesses of all sizes with dark and lit fiber, as well as government facilities, schools, and libraries.  And it even facilitates a free Wi-Fi network for the public.

Many communities that deploy their own fiber networks own municipal electric utilities.  This is a distinct advantage.  That's not the case in Santa Monica.  Santa Monica's path, an incremental build that required no debt, provides a possible option for other communities similarly situated.  Here are Jory and Chris.

01:11:

Chris Mitchell:  Welcome to another edition of the Community Broadband Bits Podcast.  I'm Chris Mitchell, today speaking with Jory Wolf, CIO for the City of Santa Monica.  Welcome to the show.

01:21:

Jory Wolf:  Thank you, Christopher.

01:22:

Chris:  It's wonderful to have you on.  We've been talking for the past year or so, as we gathered research for the report we've just released, on Santa Monica City Net, a network run out of your Information Systems Department.  So, congratulations on such a wonderful network, and I'm glad we're able to bring some attention to it.

01:40:

Jory:  Thank you.  And thanks for showing the interest in our story.

01:44:

Chris:  Absolutely.  That's what we're going to talk about today.  And I'd like to start by just giving people a sense of what Santa Monica is like, for the many folks -- including myself, actually -- who have not actually been there yet.

01:56:

Jory:  Santa Monica is a beachside town.  We are here on the edge of the Pacific Ocean, surrounded by the City of Los Angeles.  We have a population of about 95,000 people at night, and in the daytime, we can get up to about a quarter of a million.  Our community, which is quite dense in population.  We have about 23 parks, though.  So, besides our density, we do have a lot of open spaces.  We also have a number of business improvement districts, and the city is really in the process of redesigning itself through a new land use and circulation element.

02:31:

Chris:  And one of the things that's really interesting, for a city that has an impressive city-owned network, is that you do not have a municipal electric department.  Why don't you tell us where your network started?

02:43:

Jory:  Interestingly, it started on the cable side.  The city had been an Adelphia cable customer for about ten years.  And we were without a franchise.  We had danced around the table with Adelphia for a number of years, about putting a franchise agreement together, and really couldn't come to terms, until the 1996 Telecommunications Act kind of came -- and it kind of bit us in the back -- um, should I say, more of the rear.

03:12:

Chris:  Right.  Where one tends to get bitten.

03:14:

Jory:  Yes.  And reminded us that there was an opportunity here not only to negotiate a cable franchise but to look out for the city's best interest and develop a broadband communications system, through the beginning of negotiations with Adelphia, with an Inet.  We thought it would be good to be able to link the school district, the college, and the city facilities -- a total of about 46 at the time -- to a common network, where we could all share on Internet bandwidth, and also share some communications platforms for reducing the cost of overall broadband.

03:56:

Chris:  So rather than just having them provide this service for free -- and many cities have found sort of at whatever level the cable company decides to provide it.  You decided to take it into your own hands, and to have them put the fiber in the ground, and you'd be in charge of making sure that it was -- you had the right capacity and reliability and all that sort of thing.

04:12:

Jory:  You bet.  We had been relying on a Verizon shoestring network of frame relay circuits at the time.  And we knew what it was like not to own this asset.  We knew what it was like to lease it from others.  And to pay through the other end of your body, up here on your head.  And it became clear to us that this was something that we weren't going to bleed through the nose on.  We were actually going to own it.  And we negotiated an agreement with Adelphia that said they'd build it for us for $530,000, out of capital improvement money in the General Fund, and the day we would own and operate it, and should they stop doing business in Santa Monica, we could buy it back from them for a dollar.

04:56:

Chris:  Adelphia ended up declaring bankruptcy, and has turned into Time Warner Cable.  So the network is still there.  And that part of the network you still use.

05:03:

Jory:  That's correct.  We still link the city school district and the college.  The college and school district depend on it heavily.  Although now the college is moving off of it, and it's moving onto City Net, which is the city's equivalent of the broadband service network from Time Warner.

05:22:

Chris:  There's a big, sort of grass roots, interesting story in 1998, that led to a plan and a widespread public agreement in terms of the value of having this kind of network.  And that story is told entirely in the case study that we did.  But we're going to turn now to just the last piece of that Adelphia franchise, which is -- What kind of cost savings did that generate for you, because you were operating your own network, versus leasing circuits?

05:49:

Jory:  In the first year, we were able to save close to half a million dollars by operating our own network.  It was fortunate that we were able to not only save significant amounts of dollars, but we were able to go from a 128-k[bps] frame relay network to a 2-gig backbone.  Imagine what that was like for best practice.  Ideal ** strategies for data centers, for storage area networks, for backup and redundancy.  And the kinds of high-bandwidth applications that we'd be able to roll out in the future.  Really became mind-boggling for us.  And we thought it was the best thing we ever did.

06:31:

Chris:  Yeah, I'll bet.  That's a tremendous amount of savings that you identified.  And one of the things we talk about in the report is how far-sighted it was for City Council to keep re-budgeting that money into your account, so that those savings could continue to accrue, and you could add on over time.  And it -- can you just briefly tell us what you did over the years, after you built the first network?

06:56:

Jory:  Well, fortunately, it all came from a telecommunications master plan that was adopted by Council in 2000.  Which was the result of a study with other cities in the area.  We set out to reach the goal -- all the goals -- of the telecommunications master plan.  And we started with universal access in our city libraries.  And so we built, eventually, 300 workstations in our five branches.  And -- actually, four branches at that time, five branches now.  And we decided that we needed to go beyond that.  So, we were sort of putting workstations that were connected to the Internet in public facilities, trying to get more and more of the public onto the Internet, to break down those barriers of universal access -- including parks and other neighborhood facilities.

We pretty much accomplished all the first two goals -- and that was to connect the community college, the school district, and the city.  The second one for universal access.  And the third was, in the event that there was an opportunity to look at extending the broadband services to the community in some other way, i.e., through -- for the businesses, for economic development purposes, or for community stakeholder institutions, for them to also benefit from the broadband, and how that would then be returned to the community in improved services.

We then looked at it.  And, interestingly, it was in 2005 that we were approached by a very large Internet search company.  They had just come to town, and they were interested in working with cities that had assets.  They'd already had experience with that in Palo Alto.  And, at the same time, we were scratching our heads and saying, who wants this stuff?  And who can we expand it to?  So we were thinking the hospitals, the hotels.  And this large company came to us, and we used them as a proof of concept.  We went to City Council, and we got their approval, for us to lease dark fiber, at the time.  And it was a go!  Everyone thought that this could be a good thing.  We completed it -- the construction -- in a very short period of time.  And treated it as a public works project.  And then it became a city public work asset, at the end of the day.  The tech company actually reimbursed the city for all the construction costs.

So a really good public-private partnership model that won a lot of local acclaim.  And we decided to start marketing our wares.  And that's where City Net came in.  We then got it branded, and we -- through the SM City Net brand -- and actually branded our city Wi-Fi at the same time.  And we said, OK, the door is open, and we're looking for companies and other stakeholder institutions to join.

09:53:

Chris:  I think it's worth emphasizing that they came to you.  This is something that we often see.  You had the far-sightedness to put extra fiber in the ground, knowing that it would be useful in the future, and that it would be incredibly costly to add new conduit if you ever needed it.  So you had extra fiber available.  But we need to emphasize that that was not a part of the franchise fiber.  All the franchise fiber was dedicated only for public use.  And so that's one of those situations where you get a better deal on the Inet, but you can only use that for public traffic.  So this is the fiber that you had put in yourself.

10:29:

Jory:  It was.  And, interestingly, it just so happened they were just about one block off of our loop -- our main loop that we had started building ourselves.  Through some transit grant funds, we had built one side of the loop in our main commercial corridor within the city -- pretty much central to Santa Monica.  And through a joint trench agreement with Pac Bell, in the day, we were looking for a way to continue to expand the loop and complete it entirely.  And through that joint trench agreement, we were able to do that.  So, on top of the $530,000 that we spent for the Inet, we continued to invest through -- with matching funds for the transportation grant money -- and through the joint trench agreement with Pac Bell, to build a second loop, entirely independent of what became the Time Warner network Inet that was built by Adelphia.  And then continued to build it, as more grant funds were available, and more General Fund savings became available, by letting go of our leased circuits from Verizon.

11:41:

Chris:  Over time, you found more businesses.  Some more businesses were interested in the dark fiber.  But, ultimately, a few years later, you came to the conclusion, after talking with small businesses, that there's a number of businesses for whom dark fiber wasn't appropriate.  What did you do at that point?

11:56:

Jory:  It became clear to us that a business would have to be pretty tech-savvy already.  They'd have to have staff here locally, in which to use dark fiber.  They'd have to, of course, put their own electronics on either end.  And they'd have to configure it.  And it's something that they would end up having to maintain.  And we realized that there are lots of companies in Santa Monica -- as there are in every city -- that really don't have that work force, that tech work force, here locally.  They do in their corporate headquarters, or they may have it on a regional level.  But if cities really want to expand broadband services to their community at large -- and to every sector, not just the high-tech tech -- they need to go to lit services.  That's been extremely valuable, because businesses now can acquire our services -- you know, the broadband services -- and they don't have to worry about configuring their networks, and about the optical gear, and about managing all of the technology -- the switch technology -- to make it all work.  We now provide 24-7 network operating services that monitors the network and manages the equipment.  We also have a customer portal, so they can see packet losses, any ping losses.  They can also detect, you know, how long their up-time has been, and submit any trouble tickets, or learn of any warnings or any outages.  And then we also have remote-hand service available to them.  So, in the event that they don't even have people in their office, we can gain access through the property management company or the property owner, and we will reboot their equipment for them.

13:42:

Chris:  So, basically, you have a variety of ways that you're reaching out to make sure local businesses are connected.  You do dark fiber.  You work with an ISP to use these lit services, by bundling small companies together.  And then, yet another way is that you make dark fiber available to existing competitors -- you know, other companies that might even be seeking the business of some of the businesses you'd like to have.  And so, that's -- it's a demonstration, I think, of -- there's never any one solution to a lot of these problems.

14:16:

Jory:  We are agnostic.  We will provide fiber optics to our quote-unquote "competitors" -- who we don't see as competitors.  We got into this business by wanting to prime the pump.  We didn't get into this business to be a competitor, and to drive the market, or drive anyone out of the market.  We really got in here to create the marketplace, so that Santa Monica would be fiber-rich, so that we'd be able to nurture the businesses that were here, and attract new ones to come.  We will lease our fiber, and create master agreements, with third-party providers and people who resell our fiber optics and services.  And we work with any ISP who is able to provide discounts to our local businesses that we will broker, and then pass those on to those businesses for additional savings.  We find that many companies see us as the competition.  Those tend to be the larger companies.

15:18:

Chris:  Would you really say "many" of the companies see you as competitors?  Because I would suspect that you would have a few big companies that see you as a competitor.  But you're enabling many other companies to compete.

15:29:

Jory:  We are here to reduce the cost of telecommunications services.  Typically, our broadband service is to community businesses, institutions, and stakeholder organizations.  We're not here to pump up an industry.  We are here to level the playing field.

15:50:

Chris:  And so, that's one of the benefits to the community, this leveling of the playing field, and particularly to businesses, at this point.  But what are some of the ways that City Net has impacted the rest of the community, to provide some benefits?

16:05:

Jory:  It's been incredible.  We realized early on that once we had a broadband network with some real strength, that we'd be able to do some new-age kinds of applications.  And we set out to look at mobility and transportation.  We put all of the city's traffic signals on the network.  And now they're all synchronized, and they're managed in a transportation management center.  We also hold the -- are in the process of finalizing holding the light green for traffic signal priority for our rapid buses, called the Big Blue Bus, and the LA Metro Rapids as well.  And we have traffic signal cameras galore.  We have more than 50 of those.  We have -- it supports our Wi-Fi.  So we now have free Internet access in 32 Wi-Fi hot zones in the city, as well as over a dozen major commercial thoroughfares.  Entire streets within Santa Monica are now Wi-Fi enabled.  We have real-time parking signage that we collect in our structures, our lots.  And even the wireless parking meters that we have on the street.  And we push that out, real-time, to the signs in front of the structures and the lots.  And also to cell phone applications, for the public to be able to find parking as quickly as possible.

17:32:

Chris:  In 2014, that's not uncommon.  But you were one of the pioneers of it.  Am I right?

17:37:

Jory:  Yes, we were.  We developed our own system for managing the availability of parking spaces.  We've now turned that over, in public-private partnerships, to other companies to do that for us.  And we have also been pretty much pioneering the transit priority system for this whole region.  We came up with the whole new -- with the idea of using Wi-Fi -- connected to fiber optics, rather than using copper, with loops in the ground, to detect where our transit vehicles were.

18:13:

Chris:  Wow.  That's pretty incredible.  Is there anything else that you want to tell people, in the last minute we have?

18:17:

Jory:  Fiber optics -- and what fiber optics will provide -- has been revolutionizing the way that government provides services in this community.  But beyond the services that government provides, it has enabled a new economy, a start-up economy, with incubators and accelerators, and has enabled even our hotel industry, and especially our hospitals, to be able to be in compliance with new regulations, and also to be very competitive in a new economy.

18:50:

Chris:  I really hope that people take a look at the case study.  Because there's a lot more details available to what you've done than we've been able to cover.  But thanks for coming on and doing the interview with me.

19:00:

Jory:  It was a pleasure, Chris.  Thank you.

19:02:

Lisa:  Be sure to check out our report, "Santa Monica City Net: An Incremental Approach to Building a Fiber Optic Network."  You can download it at ilsr.org or from muninetworks.org.  You can also go to smgov.net and do a search for "City Net," and you can review Santa Monica's information on the network and all the services they provide.

Please share your ideas for the Broadband Bits Podcast.  If there's a topic that interests you, or if you would like to hear from a specific guest, feel free to e-mail us.  Write to podcast@muninetworks.org.  You can also follow us on Twitter.  Our handle is @communitynets.  This show was released on March 18th, 2014.  Thank you to the group Valley Lodge for their song, "Sweet Elizabeth," and licensed using Creative Commons.  Have a great day, and thanks for listening.