This is the transcript for Connect This! Episode 4 - Marketing. Christopher is joined by Jeff Christensen (President, EntryPoint Networks), Dane Jasper (CEO and Co-Founder, Sonic), and Travis Carter (CEO, US Internet) to talk about open access models, and the challenges and opportunities they present. During the discussion they discuss barriers to entry, differentiation, dark fiber, and why we don't see more cities pursuing projects like this. They also have a little fun sharing what they think the FCC has gotten right and wrong over the last 4 years, and what Comcast's recent announcement about bandwidth caps will mean for users and competing Internet Service Providers (ISPs).
Christopher Mitchell: Who did Blazing Saddles? Now, I'm just spiraling here.
Dane Jasper: Mel Brooks. Mel Brooks.
Christopher Mitchell: Mel Brooks, thank you. That's just terrible. I have, once again ... So, this is the thing. I do introduction and then I start hearing myself because I didn't mute my own dang thing so I can watch the stream. I'm excited for this conversation. This is going to be possibly the most contentious Connect This ever with Dane Jasper, the CEO of Sonic in California. Welcome to the show Dane.
Dane Jasper: Thanks Chris, good to see you.
Christopher Mitchell: It's good to see you, you're looking magnificent in the lightning today.
Dane Jasper: Oh thank you, I got a new ring light. I'm very thrilled.
Christopher Mitchell: Yes, it's working for you. We also have Jeff Christensen. Welcome to the show Jeff.
Jeff Christensen: Chris, good to be here. Thank you.
Christopher Mitchell: You may know Jeff from numerous interviews in the past with me, from his Tedx career from entry point networks. He's done a lot of work with [inaudible 00:00:57] and other communities to be named later in terms of building a specific type of open access network that we'll be talking about. Then, we also have a returning champion, Travis Carter from U.S. Internet. Welcome back Travis.
Jeff Christensen: Woot- woot! Thanks Chris.
Christopher Mitchell: I'm Chris Mitchell at the Institute for Local Self-Reliance. I host this, at least until we can find someone better. I am very excited to spend the day talking about open access, but we're going to start by just a quick survey of something that the current FCC and chairmen Pai got wrong, something that they got right. I'll start with you Dane. What did they get wrong, what did they get right?
Dane Jasper: Well, it's certainly been an interesting time with this administration. I'd start with what they got right. They really focused on a deployment agenda and there's a few items that were positive there. The one that really stands out for me is the reforms around One Touch Make Ready to assure carrier's access to poles in a more streamlined way. So, I'd say they got that right as they thought about deployment. Wrong? They're really engaged in destroying competitive local exchange carriers by eliminating the entire bones of the '96 Telecom Act and the core of that is unbundled network elements and access to the legacy copper and intercity fiber, and setting those aside last month was just a really bad decision.
Christopher Mitchell: That's something that we haven't covered here. I think a lot of people many not have heard about it, so I just want to spend a second. This is why companies, like you, are able to lease, or actually, the incumbent is required to lease you service so that you're able to connect customers without having to build a whole new infrastructure, which was the whole framework of the 1996 Act, which was gutted slowly and quickly over the years.
Dane Jasper: Yeah, I mean, this is a huge loss for competitive carriers, and what the act recognized was that you had these monopoly facilities that were paid for by rate payers, this is copper lines to every home and fibers between cities, and unbundling that, making that available to new market entrance would facilitate competition, and for us, deployment. So, we will deploy first a VDSL service, it might be a 20, 40, 100 megabit service over copper while we build fiber to the home. So, the loss of that framework is a big hit for competitive carriers.
Christopher Mitchell: Yes, and poorly covered. So, Jeff, this is supposed to be a lightning round, I've already failed at my hosting job to keep it a lightning round.
Jeff Christensen: Yes, you have.
Christopher Mitchell: What have they gotten right, what did they get wrong?
Jeff Christensen: I think what they got right was giving help to communities in density areas that need help with financing and funding. What they got wrong was 25/3, or continue to get wrong was 25/3 Fibers should be the basis of almost everything, maybe not everything, but almost everything.
Christopher Mitchell: Yeah, not only is it wrong, they've locked it in for 10 years. Some of the people getting RDOF money may be getting 25/3, subsidized in ten years.
Jeff Christensen: Yeah.
Christopher Mitchell: Travis, what did they get wrong, what did they get right?
Travis Carter: Well, I think Jeff took my wrong. As we've alluded to in the other conversations, I think 25/3 is terrible, especially using public funds for that. Especially with the advent of gigabyte over 16 years ago, don't you think we should be deploying that as the minimum today? But, what the Trump FCC did, Chris, did right, six gigahertz spectrum, the entire block open for Wi-Fi, I think will be one of the biggest lead behinds, the high end of the 5/9 spectrum that's available now for Wi-Fi. And, I think the CVRS auction strategy was really well done, and the allocation of spectrum for small carriers in the 3/6/5 range. So, that's what I think they did right. I have to copy Jeff on the wrong. 25/3 is a joke as far as I'm concerned.
Christopher Mitchell: I have no disagreement with any of those claims. I would use a moderators privilege to say that the thing that I think they got the most right that I was totally surprised by is the tribal priority window for 25, I think that's really important. I think we desperately need to create more spectrum assets for tribal governments. The thing that I, another thing I think other people may not have caught up on was when they did the auction for CAF II, they made it very transparent, and having access to that I think has really been a benefit for people to study and get a sense of what happened, and that's really nice.
Christopher Mitchell: What they got wrong, I think so many things Travis, so many things.
Travis Carter: All right, let's here.
Christopher Mitchell: No, but I'll just focus on the most recent one, which is this nonsense about overbuilding in which they basically, particularly Commissioner O'Rielly is just lying or getting his facts way wrong in terms of accusing one local company of overbuilding another. This is something that we will be talking about in the future because this is something that I think we're going to hear a lot about, whether or not governments should be creating competition and how much we should spend to make sure the government doesn't accidentally create competition by mistake because republicans right now are pushing to spend a lot on that, and I don't think it's worth it at all.
Christopher Mitchell: So, the topics that we want to get into are going to be dealing with open access, but there's one other thing that I wantad to cover because I think Jeff has interesting ideas on this, and Dane, you've been very outspoken, bandwidth caps. Comcast has announced new bandwidth caps, I kind of think it's a surprise. Many of us thought they did not have bandwidth caps in New England because they faced so much [inaudible 00:06:51] competition in those suburban areas, and they decided to embrace bandwidth caps anyway. So Dane, let me come to you first once again and just ask what's your take on this?
Dane Jasper: I mean bandwidth caps are a side effect of failed competitive market. You have an oligopoly , a duopoly at best, but for higher speed services, the kinds of services that users have more download or upload would want are generally a cable monopoly in most markets. So, this is rent seeking behavior. It's opportunistic. The fact of the matter is, the sort of costs of goods sold, the Internet content people are consuming and creating is diminished compared to the cost of the infrastructure, and whether the lights are blinking or not blinking or your sending or not sending data over the line, it doesn't really matter. So, it's a pretty transparent kind of cash grab.
Christopher Mitchell: Jeff, you're a huge fan of bandwidth caps, if I'm not mistaken.
Jeff Christensen: Yeah. I am actually a fan of this because I think accelerates the demise of this model. So, we had more cheers than jeers from this decision. It'll be interesting to see what their data, I mean, I want to give them some credibility on making the decision that there's some business reason. But, I think we all know, there's probably not, and that they're ... I spent a lot of time in New England and in many places they've got a monopoly. So, they're behaving like a monopolist and they're looking after their interests and not really thinking about the subscribers interests. So, I think it's short-sighted and we'll see where it goes.
Christopher Mitchell: Travis, is this something you're reacting the same way where, much like Jeff, you're just excited to have one more thing to have Comcast driving their own customers into your arms?
Travis Carter: Yeah, I mean, it's one of the greatest marketing pieces ever. I commend Comcast and I highly encourage them to keep doing it because it just increases our market share in Minneapolis and St. Paul.
Christopher Mitchell: Now, like I said, we're going to devote time to this overbuilding nonsense, not that I think ... I mean, let me just be clear, I think it's important to have a good debate and be honest about the role of government in creating competition, I don't think that's what's happening with this talk of overbuilding we're hearing about suddenly from republicans on the hill and from FCC Commissioners, but Jeff, in the short version of this conversation, what's your reaction when you hear this talk about overbuilding being bad?
Jeff Christensen: [inaudible 00:09:50] looked, so I haven't had my ear to the ground enough to hear the specific sources, so I am interested in hearing from you, is it like Marsha Blackburn or who?
Christopher Mitchell: In this case, well, it's Commissioner O'Rielly that was raising some issues from Wyoming, but then that led then to republicans, specifically ... Now I'm doubting myself as to who it was exactly, but commissioners on the [crosstalk 00:10:20]-
Jeff Christensen: It's okay.
Christopher Mitchell: See what happens when ... Yeah, so the ENC [crosstalk 00:10:20]-
Dane Jasper: Energy and [inaudible 00:10:26] Commissions.
Christopher Mitchell: It is energy and commerce, yeah, that's what I was thinking but then I was like, wait, but where's the telecom? I get so confused between all the state committees, they change them every two years at the federal level. Anyway, ENC is the major house committee on this stuff and the republicans they are calling for a major auditive reconnect, which enrages me because it's like, let's investigate all these small carriers that have gotten a little bit of money to do this thing and let's not investigate the billions of dollars that have gone to Frontier and Windstream, which have declared bankruptcy in the course of getting billions of dollars, or AT&T which appears not to have made a connection better for a single person in Mississippi after getting a quarter billion dollars.
Christopher Mitchell: That's not auditable, but let's audit these small programs, the small grants. So, I'm livid about it, and that's more or less the issue is whether or not government programs [inaudible 00:11:18] money is going to carriers that are then building in an area where there's already a company that claims to be offering more than 25/3.
Dane Jasper: And Chris, I'll say, I think one of the roots of this is the use of the word overbuilding. Overbuilding does not mean you are building too much, it does not mean you're paying for a network twice. Traditionally, use of the term over builder, and over builder just means someone who enters a market when there is already an incumbent. So, you might have a cable company that's providing cable TV and then another cable company comes along, builds a cable plant, and offers cable TV. They are considered an over builder. They're not a first market entrant, it's a second market entrant. What I think O'Rielly and others have done is torture this term and turn it into overbuilding is bad, it means we've built too much or we're throwing too much subsidy money at something.
Dane Jasper: And, O'Rielly has some good examples where one or two school districts have said, well, the city is building a fiber network, but let's also get one from the fed and let's get subsidy money from that as well. That is waste in the program, and it is appropriate to label and find waste and eliminate it, but the word overbuilding isn't the right way to define that. Overbuilding just means competition.
Christopher Mitchell: I want to just say that, Dane, you're someone that I trust, you get your facts right. So, I'm going to assume that's correct. In the examples I've seen O'Rielly cite, it's often where it's a private company, which anytime I've looked into it, that company's been charging a ton of money and the district decides it would be cheaper to build their own network. But, I'm sure that, like I said [crosstalk 00:13:09], you're someone who gets your facts right.
Dane Jasper: No, you're right. There was an example used which was a district which was trying to get federal subsidy money when the city was already building a fiber network to them, it wouldn't be there for a year, so they said, "We'll get subsidy money, and we'll end up with two networks, and won't that be great?" That is waste in the program, and he's correct in citing that, but there is another example where a private carrier received subsidy money at some point in the past, built a network to the schools, hasn't fully recouped their cost, and now another bidder has offered cheaper service than continuing service with that carrier who got subsidy money. O'Rielly says, we should pay for a new market entrant to build a new network. Well, he's right because the first market entrant should be able to beat the new market entrant on price.
Dane Jasper: You need to have an open procurement process and you need to keep the incumbent carrier, even if they were subsidized honest with regards to the rates that they get, and this is not the same as a program like the NTI, BTOP, or RDOF, or one of these programs that's seeking out unserved premises. This is the E-Rate program that is seeking to connect every school at the lowest possible cost. If someone new comes along and says, "We're going to do it cheaper than those other guys." We, the government, the public, spending this money, we should welcome that rather than making sure we're still lining the pockets of the person who got the grant fiver years ago.
Christopher Mitchell: Yeah, I fully agree, and I would say that I agree with Commissioner O'Rielly's sentiment and others that there's limited funds and we want to make sure they're spent in the most effective way possible. So, Travis, I want to give you a chance, if there's anything. You stay as far away from this stuff as possible. So, [crosstalk 00:15:03]-
Travis Carter: Well, since we historically don't qualify for anything, but I am very sympathetic to a private company that has taken out a substantial amount of debt to build a network and then have public funds being utilized to, I guess, overbuild or compete with you at a reduced rate. That would hit close to home. The other side of it though is I'm never worried about it because we should be able to provide a better quality service than anyone that wants to come in and overbuild, which I think, quite frankly, discourages people from doing it. Lastly, who is the referee to decide when and where these dollars should be spent and if they're doing it in a malicious fashion because the current private company may be is charging $10 more than somebody the referee thinks they should.
Travis Carter: Who's decision is that? The other market is the market at the end of the day.
Christopher Mitchell: Right. This is, I mean, the E-Rate program has a competitive bidding process which is supposed to deal with some of those concerns, but actually, I think this discussion, in some ways, really leads well into our discussion about open access because it's a discussion about building these different networks on top of each other in ways that may not be necessary if we have open infrastructure that can support that kind of activity. Both Dane and Travis go way back to the day in which there was open access, there was a telephone network that effectively anyone could use and gain access to customers. What we're going to be talking about for the rest of the show is in some ways, if we could rebuild that, and as we are rebuilding that in some cities, a common fiber network that could be used by multiple carriers, how should we do it? What are the little nuances that we need to cover?
Christopher Mitchell: So, maybe we could just firstly lay out the approach that Ammon has used, Jeff, Ammon, Idaho, which is using a specific kind of open access that Dane will later be critiquing. We'll start with discussing this approach because it's usually the one people are pretty excited about right now.
Jeff Christensen: Let me give you an overview, quickly.
Christopher Mitchell: Yeah, yeah. Just do a thumbnail sketch.
Jeff Christensen: Yeah. So, as you think about overbuilding, I think it really asks the question what's wrong with the system? If we're going to fix something, what should we fix? What's broken about the way we're delivering these services today and the infrastructure? So, what Ammon has done is they've partnered with Entry Point. We developed the technology and the difference between what we're doing and say Utopia, I think Utopia's, right now, the biggest open access contortum in the country, and they've got 15 service providers, and it's what we call manual open access. What Ammon's got is software defined automated open access. So, the consumers at Ammon, they pay for the infrastructure [crosstalk 00:18:12]-
Christopher Mitchell: Subscribers Jeff.
Jeff Christensen: Subscribers, thank you. The subscribers pay for the infrastructure independently, they pay for the maintenance and operation of the network independently, and they pay the ISP independently. The magic in Ammon at the service provider level is they can switch dynamically. So, if you're frustrated on cost or service, whatever, or your service goes out, you just switch. It's a web portal, and you get in, and you move.
Christopher Mitchell: So, if Travis wants to jump in, just tell him briefly what he would have to do to offer service on there, and then he can ask a question or two to clarify. Once Travis gets it, I'll be sure that our audience has a sense of it.
Jeff Christensen: Yeah, so, all the providers have, there's a provider portal, there's a network operators portal, and there's a subscriber portal, and the service provider would basically get a presence of what we call the provider edge. So, you'd be plugging in to the provider edge and basically you're going to occupy a port on a switch and the software, if a subscriber wants to move from Dane's ISP to Travis's ISP, they unsubscribe from Dane and they hit the subscribe button under Travis's icon, and the software shuts down one port and opens up Travis's port.
Travis Carter: So, I guess the question is, so every home has the same equipment in it. There's no technical advantage for one person or another. You said that the home owner contracts or pays for that? Who owns the fiber in the ground and the customer experience at the home?
Jeff Christensen: So, the ... It's a combination. So, in Ammon's case, the city ultimately is the place of truth for the subscriber, but they, as we iterate through the software, the software has become increasingly powerful at helping the subscriber to know where their issue is, and really part of the goal of software defined networking is to drive automation so that everything's transparent to the subscriber. So, if it's an issue with the ISP, the subscriber will know it. If it's an issue with physical infrastructure, the subscriber will know, everybody will know it, all the stakeholders.
Christopher Mitchell: So, if it's a physical problem, the city is the one that sends a crew? [crosstalk 00:20:54]-
Travis Carter: Yeah, that's what I'm trying to understand. So, I just got a text from my outside plant manager of some fiber that was just dug up a few minutes ago. Our crews are on the way to splice it, fix it, we've already sent notifications out to the affected customers, giving them an ETA, owning the end-to-end experience, they'll be back up and running here probably in about a half an hour. So, if I'm this virtual ISP at Ammon and I'm connected in, Suzie's Internet isn't working because there is a fault in the street. Am I calling somebody down at the city and trying to get them to go fix it?
Jeff Christensen: Yeah. In reality, you would find with this network that you're not going to get very many calls. I know you're used to owning the whole experience for your subscribers. But, in this case, the city does a fantastic job of owning the customer experience, and the combination of fiber, a very well designed network, and a bunch of automation, makes the subscriber experience really elegant, and I think if you talked to the subscribers, that's exactly what they would tell you.
Jeff Christensen: So, that doesn't mean problems don't occur.
Travis Carter: Yeah, no [crosstalk 00:22:06]-
Jeff Christensen: When they do, the fiber department at Ammon is addressing them, and they do it very effectively.
Travis Carter: Okay. So, the independent group of people actually fix all these things. So, Dane and I who are ISP's on this network basically say whenever they show up is when it gets fixed, right? We won't control that experience.
Jeff Christensen: Right.
Travis Carter: And the customer's are used to that as an okay answer?
Jeff Christensen: The subscribers know [crosstalk 00:22:40]-
Travis Carter: Okay.
Jeff Christensen: If it's an ISP issue, it becomes obvious fairly quickly [crosstalk 00:22:46]-
Travis Carter: And Dane, I don't mean to monopolize this, but I've got a million questions. So, the one fundamental question I have here is, so why wouldn't I just become an Ammon ISP, charge a dollar a month until all the other ones were out of business and then own the market?
Jeff Christensen: Well, it might work temporarily, but we've lowered the barriers to entry so much that you're going to have to do that over and over again because immediately another ISPs going to come on to the network, and you could come on from Minneapolis, we can make that happen.
Travis Carter: Well, this is what happened in the Dial-up world, at least in Minneapolis, is there was kind of this unspoken rule if Dial-up Internet costs $19.95 a month and everyone came on at $19.95 a month and this one guy Henry came in at $9.95 a month and blew us all out of the water, and then it just upheaved the whole market. So, I'm just curious because I feel the barrier of entry, there needs to be a barrier of entry in any business. If we want to open a McDonald's or a Burger King or a Subway, there's some barrier to get in. This sounds like it's simply connect at the IX and we're on. Is that how it works.
Jeff Christensen: Yeah, I mean, it's pretty inexpensive and if you have some level of sophistication, then you're going to connect pretty easily.
Travis Carter: Okay. All right. That's my fundamental question.
Jeff Christensen: Yeah, in Ammon the rates did drop to $9.99 for the ISP for symmetrical gig two years ago, but there are still four ISPs on the network, and two more are coming on.
Christopher Mitchell: So, we didn't see it drop, I mean, it sort of hit that level and then it sort of settled, right? I mean, you haven't seen a lot of fluctuation since then.
Jeff Christensen: Mm-hmm (affirmative), no.
Travis Carter: It seems odd to me. Why in the world would I get on there and compete for a nine dollar product it just seems ... because, you know, your tech support, your billing, your customer service, all of these expenses you have, doesn't matter about the fiber.
Christopher Mitchell: So, let me, and then I'll bring Dane into this too, explicitly. Put yourself back 15 years ago when you were building this business and trying to figure out how to get more customers with being limited in how fast you could build physically. If you suddenly had access to a pool of 100,000 customers to try to pull in some subscribers using the fixed assets you already had, would that be attractive?
Travis Carter: Well, it might be, but see we've lived through this model before, so every time [inaudible 00:25:19], well, who was it at the time, Quest, had a problem, the customer's didn't understand that it was [inaudible 00:25:25] or Quest's problem, it was our problem.
Christopher Mitchell: Right.
Travis Carter: And that's where, between the price issue and not owning the infrastructure so you can control the entire customer experience, I think it would be challenging to maintain a high customer service level. Maybe I'm wrong, I just think [crosstalk 00:25:41]-
Christopher Mitchell: I think if your full experience is with Quest, in Dane's case with AT&T, you might be a little bit gun shy because of how many problems [crosstalk 00:25:51]-
Travis Carter: Yeah, we've lived this already and it was not good.
Jeff Christensen: So, what you're saying is you've lived through a software defined network that's open access before? I mean, sure [crosstalk 00:26:02]-
Travis Carter: Well, [crosstalk 00:26:02]-
Christopher Mitchell: No, no. [crosstalk 00:26:03]-
Jeff Christensen: Because I was thinking we were the first to do it.
Travis Carter: No, no. This was back in the 90s. Dane, I think you're muted bud, but this was back in the 90s when we bought phone lines.
Dane Jasper: Jeff, in the era of DSL resale, when ISPs were selling DSL on the incumbent telephone companies networks, that was a software defined network. You'd get a PBC for each customer and the customers could switch ISPs at will, and that was in 1998. So, that model is not new per se, and I think the point Travis makes also is an interesting one, which is fundamentally, there'll be just a race to the bottom, and there will be a one dollar provider who doesn't answer the phone. In some way, in the long run, they hope to game some money out of the system, a price will go up in the long run or something like that. So, I look at networks like the Utopia network with 15 providers and I think 88,000 [inaudible 00:27:09] was passed or so.
Dane Jasper: A small network like Ammon, and as a service provider, I can't see the point of entering. So, that's the struggle.
Christopher Mitchell: Let me jump in there for a second Dane because I think something that you just said, I don't want to trivialize it, but one of the things that I think cities are looking to do is not just to say hey, midnight [inaudible 00:27:39], boy, today's not a good day for the words for me, but you don't want to have just any old person and suddenly be like, "I'm going to sell this for a dollar." Cities will likely be vetting this. I mean, one of the things that I find interesting is cities often have contracts with ISPs in which they will answer the phone in a certain number of rings and you can take an ISP off of the system for non-performance. So, some of these things I absolutely agree, these are real problems that could really poison the well for everyone, but I also feel like some of these things can be solved.
Travis Carter: Sorry, real quick Dane. I think Dane and I could enter the Ammon network at a dollar a month and provide as good a service as anyone that's there right now, and as soon as there's nobody ... It's the old Starbucks game or the gas station [crosstalk 00:28:22]-
Christopher Mitchell: No, but Travis, so, the second that then you try to take advantage of that and you say, you know what, now our price is going up to $12, well then I'm like, "Hey, time for Mitchell ISP, her I come baby."
Travis Carter: Sure, sure, yeah. And that's it. Yeah, like Dane's saying, it's just a race to the bottom. So, maybe for six months you're the $20 guy, and then you're back to the two dollar guy because you haven't paid for anything. All it is- is a cross connect and you're on. I mean, that's genius. I'm ready to sign up.
Christopher Mitchell: This is a benefit not a bug if we're driving the prices down that low.
Dane Jasper: Well, it depends on what you're looking for. I think what Travis is highlighting and what I agree with is that there is an opportunity for a bunch of volatility and confusion and consumers being taken for a ride [crosstalk 00:29:08]-
Christopher Mitchell: Subscribers.
Dane Jasper: Et cetera. On the other side, they might get great deals from time to time. I also say, what you end up with is vanilla. Everybody gets the same product. There is no opportunity for innovation in the product itself. It is [crosstalk 00:29:23]-
Christopher Mitchell: I'm so glad you said that because we actually have a question in the chat asking this very question. If I understand correctly, I don't want to say, what I'm about to say, I don't want it to be negative toward Utopia, but one of the things I think about the Utopia technology that they're using is that people are competing over delivering vanilla. Jeff, one of the things that your company is aiming to do is to make sure that we have Baskin Robbins basically coming in. I should have said a local fresh to market, farm to market, dairy ice cream, so there's lots of different flavors. Jeff, how do they differentiate at Ammon, and what do you expect to see as you're going through the next version of software to allow differentiation of services?
Christopher Mitchell: Bear in mind that this is specifically going to preempt Dane's next points that I really want to get to in terms of how he would do open access because I think the way you would differentiate could not happen on Dane's, and that's where I want to take the conversation over time.
Jeff Christensen: Yeah. So, the ISP reaction to the Ammon network is pretty consistent, but we didn't design the network thinking about ... We care about all stakeholders, but we really designed it thinking, "What does the customer want from their network, and what's missing today?" So, when we think about open access, the traditional definition does just relate to the ISP, it just means you've got multiple ISPs to choose from. We've just automated that interaction. Ammon as the first where you could do it on demand. Dane has an example from the 90s. I mean, the SDN protocol wasn't implemented until 2008.
Jeff Christensen: So, under the current SDN protocol didn't come around until 2008, that's the protocol we're using. To us, open means that the network is a set of resources that are open both to innovation and to consumers to get what they want from the network and then to provide inputs back in to the network. So, our definition is probably a radical definition of open access, meaning we're not really that excited about the... The ISP is a thing we've solved, and Ammon's experience has been really positive as far as the ISP stuff goes. The stuff we're excited about is everything else that will happen across the network, and that will be public safety stuff.
Jeff Christensen: Everything we're doing over the top today, giving people the ability to do it on demand at layer two, whether it's telemedicine or public safety or whatever, that's the stuff we're excited about, and we think that's the real innovation that we've got here. So, I understand ISPs can get frustrating. Really what I think we're doing is we are forcing the ISP to automate because they won't be profitable if they don't.
Christopher Mitchell: To be clear about that, I think this is important, is that you're trying to take the ISP and lessen their power and give that power to the user in new ways that I don't see other open access approaches necessarily doing because at that point the ISP, and Dane's addition, which I'll give you a second to describe your ideal, Dane, for open access, I feel like the ISP more clearly owns the user and will define what users can do. That's not necessarily bad, I mean Dane you may have reasons for why that's actually really good. But, I think that's one of the differences that I think that we should just make sure we're clear on.
Christopher Mitchell: Jeff, I mean, I think you're placing a bet that we are going to see new services, that much like in 2005, we did not see a use for Twitter, I know some people today don't, but there are applications I fundamentally believe that will be developed, the could be developed, using the fact that you're able to do more layer two stuff without having to ask anyone's permission. That's pretty exciting.
Jeff Christensen: Yeah. You will see next year things you can do across at this network you can't do across other networks. So, that's my ... Check on me in a year Chris to make sure we achieve that. But you will see innovate things that are only possible across this kind of network [inaudible 00:33:47] coming out. So, I don't want to diminish it all. I think Dane and Travis are both I'm sure running great businesses and I know they care about their customers, which ultimately, is a big part of what we're trying to deliver in terms of experience. Our definition of the problem as a lot to do with monopoly control, and we think the old model is siloed, and it's very difficult for customers to change in a siloed model.
Jeff Christensen: Really what we've done is torn down the barriers for customers. If they don't like the experience they're having, they can dynamically change, and the data doesn't back up what both Dane and Travis are worried about, which is somebody doing it for a dollar to run the market down to nothing and then take over. That has not proven to be the case.
Christopher Mitchell: Let me, I want to transition to Dane's model to make sure we have plenty of time to discuss all these options. But, I want to take a moment to say, this is very serious and the issue here that cities need to pay attention to is that Dane and Travis represent thousands of people that started these businesses and then were burned, in part because they did not control the infrastructure. Ammon is doing a really great job of professionally making sure the infrastructure remains strong. Cities that don't take this seriously, who may skimp on how fast they respond to a fiber cut or other problem, they're going to create a world of problems for themselves because ISPs have been burned before and they're not going to stick around if that's what happens in that city on that network.
Christopher Mitchell: So, Dane, I'm coming to you. I'm the mayor that has unlimited power and I want to build an interesting open access network. How do you have me do it?
Dane Jasper: Well, I think it's important for us to frame the problem, and the problem is that the residents of New York City have bad Internet, limited choices, usage caps we talked about, they're paying too much, the customer service is poor, they're suffering outages, and the community is not well connected and well served, and that is a political pain point. I really think it's interesting, there's a lot of legislation in cities that makes it very challenging for communities to invest in their own infrastructure, I think that's really wrong headed. If Travis or myself build a great network, there will not be a political will to spend a bunch of public money to build a network over the top of us and compete with us.
Dane Jasper: If, on the other hand, you've got a cable operator with usage caps and some slow DSL, and everybody in town agrees the Internet is awful, that public should be able to buy a network. When they begin that process, they hire a consultant, and they start talking to other communities, and they look at entities like Chattanooga APB, Utopia, Ammon, they look at successful models, LUS, and they say, "Well, these are successful models, they're working, they got this built. So, we should do it that way."
Dane Jasper: I think they go too far and they do more than they need to and they end up with a lesser outcome. What I mean by that is, you think we're going to build a publicly funded open access network, and then immediately, your consultants say, "Well, that should be a LIT network." Your equipment vendors say, "Well, here's some [inaudible 00:37:15] equipment that we'd love to sell you." Here's the equipment that's going to go in the home and here's all the middle wear and the billing platform and all the bits and bobs that put the stuff together. Suddenly, you've got a very complex network. You also have a network that delivers vanilla. It delivers today's symmetric gigabyte product to the same CPE in every home.
Dane Jasper: What I would argue is that an investment in a dark fiber network that is simply glass, no electronics or optronics in that network at all, and then invite service providers in to light it, create some really unique positive benefits. One, you don't have the complexity, you don't need a billing platform, a provisioning platform, it becomes a much simpler network to build and a much simpler network to budget to build.
Christopher Mitchell: So, can I ask [crosstalk 00:38:14]-
Dane Jasper: The other side is [crosstalk 00:38:14]-
Christopher Mitchell: Let me just ask a clarifying question.
Dane Jasper: Sorry, go ahead Chris.
Christopher Mitchell: The clarifying question. So, this is a network that would actually effectively stub out at the house and you would attach them there and it would effectively go back to some kind of locked area where ISPs could go and turn it on [crosstalk 00:38:34]-
Dane Jasper: So, think fiber jack or two fiber jacks in the house that go back to a central hut. Service providers locate equipment in the hut, they put in the equipment that they'd like to deploy, they provide customer equipment to plug in to the jack, and I might deploy [inaudible 00:38:56] technology, which is capable of delivering one gigabyte symmetric, and I might not do television. Travis might come along at six months, a year later, and deploy XPS [inaudible 00:39:06] equipment, and he might deliver 10 gigabyte and an IP TV platform. Someone else might come along and provide voice and home security, or something else. The point is that the service provider now has a point of innovation and a point of control, a point of provisioning. They can automate and manage their network in the ways that they manage and owned and operate a network that they might build, like Travis and we do in the markets that we serve elsewhere.
Dane Jasper: I look at Utopia, which is an open access LIT fiber network with about 15 service providers on it, and they literally have a spreadsheet that's like, here's the 15 providers, here's the five different speeds, and here's their price. It's like, they're all the same, and it's all very vanilla.
Christopher Mitchell: I think they would object to that. I mean, I could tell you that, for instance, X Mission does things differently than some of the others do, and if you talk to, for instance, Jeffrey Harris who I want to have on this show eventually who does a lot of writing about LIT closely, I would just say that we can generalize and say that we would like to see more differentiation, but I don't want to pretend that they actually are all the same.
Dane Jasper: Well, so, the other side of it is you're adding a whole bunch of unnecessary complexity. I'll say that fiber to the premise networks themselves are actually really simple. It's an optical cable that goes from the home back through a number of splice points to a central location. If a city can run a sewer system or a water system, they can run a glass passage optical network. The stuff that goes on top of that, like the customer premise equipment, the precision mechanisms, the interconnection up to the Internet, all the customer service that goes along with that is complex and the entities that will tell you, "Hey small city, you should do that."
Dane Jasper: Are the consultants that are going to earn a lot of money helping you. Your own city staff who would like to nation build and build a department for themselves, and the equipment vendors who want to sell you all the gear to run the darn thing. You're a small volume buyer who's going to try to run this whole platform, and it's unnecessary, and you end up with less innovation, and an unwillingness to enter the market from the majority of serious and large service providers. So, you think about Google who's open access project in Huntsville is dark fiber. They have another I think in Idaho that is dark conduit, empty conduit, and [crosstalk 00:41:43]-
Travis Carter: [inaudible 00:41:43].
Dane Jasper: Yeah, [crosstalk 00:41:44]. Oh, sorry. So, I think about where would we be willing to go and what would we bring that would be useful? Why is it worth us going to do that?
Christopher Mitchell: So, Dane, let me [crosstalk 00:41:56]-
Dane Jasper: ... innovation of services.
Christopher Mitchell: Right, and first of all, let me say that as we dig into this, I really want to see this happen. I want to see the empirical results. So, one of the questions that I have from a colleague of Jeff's, to be transparent, is noting that in dark fiber instances, it does not seem like we get robust competition. It seems like, effectively, it's one entity uses it. You mentioned Google Fiber, Travis has been very clear he would never enter an open network where Google is. Also, Travis is an ethernet guy, just FYI.
Travis Carter: Well, my position on Google was pretty, as you and I talked about over our last round of chicken wings is this, I just checked while we're out here, I mean, we're pushing 80 gigabyte to Google right now for our YouTube, YouTube TV, and all these other services. You think for a minute I want to compete with these guys on the access side? Who knows what happens on the content side. I'm not saying anything might happen, but it sure could, which could really impact our business as a whole. So, that's why if Google's there, I'm out.
Christopher Mitchell: So, that's the sort of thing, and so Dane, I want to say, this is a very good question in terms of where we've seen some Dark Fiber approaches, we haven't seen the robust competition. If this question goes to me, I would say that we haven't seen it in a large enough city to really know what happens, but how do you respond to it?
Dane Jasper: So, what we've seen is that the vast majority of municipalities that have moved ahead with open access networks have been convinced by their consultants and equipment vendors that they need to light that network. And [crosstalk 00:43:30]-
Jeff Christensen: What cities are those Dane? What are you talking about?
Dane Jasper: Well, [crosstalk 00:43:33]-
Christopher Mitchell: Other retailer, well, a lot of retailer [crosstalk 00:43:35]-
Jeff Christensen: Ammon has the lowest. So, Ammon has the lowest prices in the world according to the connectivity report, and they got a 63% take rate that's climbing every month. So, where's the climaty that ... Fast Company Magazine says that Ammon's the best fiber optic network in the country [crosstalk 00:43:55]-
Christopher Mitchell: Sorry, Jeff I [crosstalk 00:43:57]. I don't think, for this purpose, I don't feel like we should litigate Ammon specifically. I think Dane's making a point, which I think is unnecessarily cynical, and I'd like to reframe it to address it. Which is that, consultants who care most about their interest of their clients are worried about offering a dark fiber model that they haven't seen proven anywhere. It's classic chicken and the egg. So, I think we have a lot of cities that would be interested in this, but there's not a lot of evidence for it. So, Dane is someone who I bought on this show because I like talking to him, but also because I take very seriously that if he thinks something will work, I am very interested in trying it.
Christopher Mitchell: The issue is that we haven't seen it work. Now, Huntsville is a large city, they did this sort of ... but you had to do drops. You had to pay for the drops. So, the cost to an ISP is still probably itching up close to $1000 to acquire a customer. Dane, how much does it cost to acquire a customer in the model that you're suggesting because I think that's one of the limiters in getting customers on this model.
Dane Jasper: Well, I don't want to throw Google or Huntsville under the bus, but I will because that network was really designed for one carrier. It's ostensively open access and there's some limited open access capabilities, but because the carrier pays for the drop and does that drop facility and owns it and, more critically, because it is a split passive optical network, there's splitters out in the field. It's really a challenging network to see as open access dark fiber, and I think they've labeled it as open access dark fiber, but it would be very challenging for a second or third or fifth market entrant to go in there. This recipe requires a home run strand or two from the home and a jack in the home that is accessible to the consumer, back to a hut location where ISPs can collocate, and one ISP might deploy one brand or protocol of equipment. Another one might offer one array of services than another, a different array.
Dane Jasper: To your point of we haven't seen this work and how does a community gain confidence in this? You do need an anchor tenant. So, if you've say we've got 10,000 homes, we're going to have those homes pay to build a dark fiber network to them, we need one or two service providers who are committing to come into those collocation facilities and deploy equipment and provide a retail service, and I think that's an important confidence component. But, there's another piece to this which is, [crosstalk 00:46:42]-
Christopher Mitchell: Can we hold on for a minute. I feel like Travis hasn't talked long enough that I'm afraid of what he's going to say next.
Travis Carter: I like the idea. If there was just a ... It's the old, it's the [inaudible 00:46:53] model, right? You're going to buy payers of copper to the home, and you can choose to do with it what you want. In that case, we would lease, I assume, a dark fiber from a home or a business back to the hut, and then off we go. I mean, it's a doable model. I guess I just, I still struggle because I deal with it every single day, there's been a pothole out in front of my house for the last two years that the city was supposed to deal with, and they can't do that, and I want this same group of people dealing with my technology? That's where I struggle with it.
Dane Jasper: I certainly see that as a valid criticism and a concern. I think on the other side, if you have a community that has nobody deploying, they haven't managed to attract you, or I, or their incumbent cable operator to deploy or improve services, and they want to invest in the services, you're going to end up in an outcome where they have to maintain them. But, to clarify, the business model that I'm suggesting isn't that you would lease dark fiber to the home, it's that the homeowners would invest in dark fibers from their home, and they might do that via a bond measure, a property tax payment, a utility user's tax, [crosstalk 00:48:13]-
Christopher Mitchell: A home loan. We talked about this in a show that I should've done as Connect This with [inaudible 00:48:20], last week, and I think Ry will make a note to put it in the show notes along with this. But, yeah, I really like that. Dane, you're talking about creatively financing this in a way similar to what Jeff has done in terms of creative financing. This is a question that came up in the chat, so I wanted to address it. I feel like the model that, what you just said Dane suggests to me that we would not expect that a city would say, "I kind of like what Chattanooga's doing, I'm going to bond it the same way, and I'm going to build it, and it's going to pay for itself in the same way."
Christopher Mitchell: I think this is another issues that cities have to deal with is that open access, coming into the United States in 2020, is not something that will just generate enough revenues in the first five years to pay for itself most likely.
Dane Jasper: Well, the thing is, cities are and should be averse to risk, and fundamentally, I don't think that they should need to worry about take rate, or service fees, or credit worthiness of service providers. The idea here is that the public, the homeowners, collectively, based on a majority decision, decide that they want to build a multi-million dollar fiber to the home network, and they're going to pay for that over time in some way, like a utility users tax, or an assessment on their property tax, just like you would today if you're repaving a road or upgrading a sewer system. Now, what you have, is a home with a tail, a home with fiber going from the home to the central point, and that's being paid for on your property taxes. You own that now.
Dane Jasper: Now, Travis or myself rent a rack in the hut or in the central location, and we cross connect to those locations, and we don't, there's no need for record keeping or billing because the consumer says, "Please connect me to ISP A, and we send a technician in and plug that in. There's no billing relationship with the city because the public has paid for the network and it's attractive to us because we're not building a network, so we can now deliver a cost efficient service. We haven't seen this model advanced I think because there's a lot of momentum around you have to manage and light a network, but I really think it's a wrong headed way to look at it.
Christopher Mitchell: This model frankly solves the cost issue of digital divide. It really drives the prices down. You can put interesting requests on it. I will say that one of the reasons we've been very successful about fighting attempts to stop cities abilities to build networks is because most of the cities that have built networks have done it without using tax payer dollars. What you're proposing is a on the board, totally transparent, subsidy for building an open network, which I love. But, I can imagine that Comcast will have a field day rallying legislators to say, this is unfair. We can all laugh about it, but at the end of the day, we're not going to be giving millions of dollars to those folks in Sacramento to make sure that we can keep this model going.
Christopher Mitchell: So, I feel like, that I think is the biggest challenge to this model. I'm very happy to work with communities that want to overcome it because I think this model literally gets us ... I mean, frankly, I don't want to say this model, like yours Dane ... Dane and Jeff, you're both close enough to each other that either one of these models gets us to the country, what we want to be in terms of having access to everyone, everyone being on the Internet, having choices, innovation, things like that.
Christopher Mitchell: So, let me throw it back to you Jeff because, once again, you haven't said anything in a while.
Jeff Christensen: Yeah. So, I mean, the difference really, Dane, I'm not arguing if the city wants to put it to a vote, great, I'm all for that, I think Chris is right that in most cases they can't do that, you create an opposition that may not be there otherwise. In our model, we just leave it to the subscriber to choose whether they want to opt in or not. The key thing is, on the technology side, what you're saying is complexity is the problem, our whole premise is the way to solve the complexity is with software. You solve complexity with automation. That's, I mean, in the world we live in, that's the way complexity gets addressed everywhere. Our model, we sometimes refer to it as data synergy [inaudible 00:52:49] premise.
Jeff Christensen: So, we really, software defined networking's primarily been implemented in the data center. To some degree in the enterprise, but primarily it's been implemented in the data center. So, we took that model of what's been implemented in the data center, and said, "All right. How do we overlay this onto a city? This same functionality." Really, what we're doing, is what you want to do physically in terms of plugging somebody in and unplug them, is we're doing that with software and automation and this SDN protocol.
Jeff Christensen: So, we would argue that you're still at a siloed model, and what it reminds me of is the first time I went into a data center and I would see Company A partitioned from another company with a cage, that's my strongest memory of going into a data center. There was a physical cage to separate this company's rack of computers from that company's rack of computers. We don't see that cage anymore because those physical problems are all solved with software and we would argue, we're much more open to innovation in our model because we make it easier for the telemedicine company ... I mean, if you're going to give an ISP control of the last mile, then what about some other company that wants to do something dynamically across that network connection. We can do it because we've got virtual machines, we've got containers at the edge.
Jeff Christensen: So, our whole premise is that everything interesting is going to happen in software at the edge. [crosstalk 00:54:29]. Go ahead.
Dane Jasper: I would respond to that and say that everything interesting will happen over the top. In the long run, it's true today, in the long run, the Internet is the application. All of the stuff that will come over it, and you think about cable TV is a great example, right. It used to come in over a coaxial cable, and now, it doesn't matter. You're on Wi-Fi, you're on a tablet, you're on a television, it doesn't matter. Television and being entertained is now an app.
Dane Jasper: So, I get the idea that there might be some future innovative application that requires layer two, but I'm very skeptical of that complexity is required. In the end, for ubiquitous access to whatever that recourse is, it'll go over the top.
Jeff Christensen: Chris, you should have us on in a year and we'll see if anything [inaudible 00:55:23] at layer two in an automated way.
Christopher Mitchell: No, I think this is good because this is ... I just go back to, there's very good reasons that engineers will say one or the other and the people that follow this very closely will focus on what trends will go one way or the other. I just think that one of the reasons I like having both of you on is I think you're interested in knowing. You're not going to be interested in lying about the results of next year, but if you see these applications develop, I'm very interested in it. One of the things I wanted to make sure was very clear to people who are listening is that both o fu are also proposing something that we don't see proposed by cities, which is that the service provider is not paying for the infrastructure, is not paying for access to the infrastructure.
Christopher Mitchell: Most cities are contemplating, where there's open infrastructure, you charge a fee per line, and you're proposing that, once again, we adopt the road model. Which would be, UPS does not pay per house it goes to and uses the roads to get to, it just uses the roads as it sees fit. It's not a perfect analogy, but this is something that I think is really interesting and further drives the price down, but it does then put more pressure on the public to finance it, whether it's through a user fee upfront, as Jeff does, which can be amortized over many years, or via a public bond in the way that Dane is proposing. This is a show that mostly, I think, attracts people who are deeper into this than cities, but cities should be trying this.
Christopher Mitchell: This is the time to be trying to figure out how these different models would work well. Travis, let me give you a chance to jump back in.
Travis Carter: Honestly, I kind of like both models. I like Jeff's model because the barrier of entry is really easy to get into and I could be the five dollar Internet guy in Ammon or wherever it is and because my [crosstalk 00:57:16]-
Christopher Mitchell: It's [inaudible 00:57:16], you should drive there. You should take your 5G modem and go there.
Travis Carter: Because I'm the same as everybody else, right? Where it's just a homogenous, I mean, okay maybe I can put a content serve a little bit closer, that's about all I can really do in Jeff's model. In Dane's model, now Dane and I can actually compete because maybe Dane's a [inaudible 00:57:37] guy and I'm an active ethernet guy. Now I have something I can market to and I can actually differentiate myself from Dane and Dane the same thing here, no different than what we do at Century Link in Minneapolis. Century Link is a [inaudible 00:57:49] network, we're an active ethernet connection, [crosstalk 00:57:51]-
Christopher Mitchell: Yes, that's the big different between you guys.
Travis Carter: Yeah. So, what do you think we do? We promise the hell out the [inaudible 00:57:59] technical thing. The part I'm totally confused in both of these models is, and this is coming from a guy who's probably knocked on 3000 doors, are you proposing that I go up to a future customer and say, "Oh, hello Mr. Customer. I'd like to raise your taxes to pay for Internet." And they will turn around and look at Comcast and go, "Yeah, but I know it's expensive and it sucks and I got to call them every year, but they're not going to charge me more." Just the way taxes work here in Minneapolis, they charge us for something called the Metradome, which was some stadium for sports players back in the 80s. We're still paying the tax!
Travis Carter: They torn it down and stuck up a new one. So, the tax is never going to go away. So, I guess I would just ask how are these networks going to be funded?
Christopher Mitchell: So, Travis, let's just be clear though, there's multiple instances in which conservative and liberal places have voted to either increase their taxes or to use their tax payer dollars to build networks like this. In the event, you are not the public face of that campaign.
Travis Carter: No, I'm just wondering because someone's got to pay for this, right? These things, I mean, I know how much my debt is right now, and I don't know if Dane's flush with cash right now, but that service through the nose [crosstalk 00:59:13]. Yeah, these networks are not cheap. So, I just don't, I'm not sure I totally understand how these networks get paid.
Christopher Mitchell: One other thing to just keep it light. Dane is building underground in San Francisco. You're building underground in Minneapolis.
Travis Carter: Yeah, he's got it way worse than I have. Yeah.
Dane Jasper: Well, to be clear, we're building aerial in San Francisco.
Christopher Mitchell: Oh, you're right. I'm sorry.
Dane Jasper: Our networks are in San Francisco, Oakland, Berkeley, I mean it's San Francisco Bay Area, it is an expensive place to build. Fundamentally, what we're talking about is asking the public, do you hate your provider? Does your Internet suck? Just like today, we go to the public and we say, do your schools suck? Would you like to pass this bond measure which is going to make your schools better? Would you like to make the libraries better? The public passes bond measures and they accept the outcomes of those. Yes, sometimes that means a stadium, which is not where I'd spend my money, but it needs to be a majority, or a super majority in some cases, vote. If everybody in that town agrees that their Internet is really poor, and if the bond measure says, we can raise money and pay for it over 20 years, which is something I can't do, I can't raise 20 year money.
Dane Jasper: I also can't pay the interest rates the city can, right? They get very good interest rates. So, if the city says, "To build a dark fiber network that's going to last 50 plus years to every home, and to pay for that over 20 years is going to be a $300 per year assessment on each property's property tax, or a $20 a month assessment on your water bill for the next 20 years, but what you've built then is an optical network that's gigabyte plus capable to every home that goes back to these central points. Here's one or two carriers who have said, "Gosh, we're ready. If that network existed, we would offer services over it." So, that's the premise.
Travis Carter: And who is going to pay the legal fees to fight Comcast, Century Link, [inaudible 01:01:24]?
Christopher Mitchell: The cities are. I mean, this is the city [crosstalk 01:01:26]-
Travis Carter: Oh, no. We learned that. They won't.
Christopher Mitchell: Well Travis, in that case, you're right. They won't. But, I [crosstalk 01:01:30]. [inaudible 01:01:32]. So, empirically, Lafayette spent three million dollars roughly in legal battles over five years for the right to build their fiber network. So, there's different experiences with different folks.
Travis Carter: I would be real interested to talk to that guy because whoever ran that program in Lafayette had ... I've never met anyone that works at a city that's like, "Yep. I'm willing to take a five year battle to get this passed." Okay, so there's one example.
Christopher Mitchell: No, there's multiple [crosstalk 01:02:00]. Monticello, Minnesota went through a [inaudible 01:02:03] battle.
Travis Carter: Yeah, and that was a fiasco, right? [inaudible 01:02:07]'s running that network now. That's not even being run by the city anymore.
Christopher Mitchell: Well, the city still owns it. Actually, I just did an interview with Jeff O'Neil, not Jeff Christensen who's on the screen, about that. My point is just that many cities have gone for it. Your premise is that cities will be scared off from the lawsuits, and there's just [crosstalk 01:02:24]-
Travis Carter: Well, okay, cities [crosstalk 01:02:25]-
Christopher Mitchell: Some cities will be, some cities won't be [crosstalk 01:02:26]-
Travis Carter: How about cities like San Francisco or Las Angeles or Dallas, like [crosstalk 01:02:30]-
Christopher Mitchell: Well, if San Francisco would stop having its top officers indited, we could talk about it.
Travis Carter: I'm talking how about an NFL market, are any of them doing it?
Christopher Mitchell: I don't think so. I don't think this is an NFL market kind of thing right away. I mean, I think it's a smaller city thing.
Dane Jasper: The thing is, Travis, those large markets don't have the same problem that these small markets that have been neglected have, and I don't think [inaudible 01:02:52] majority of voters in Las Angeles or San Francisco saying, "My Internet is so awful or unavailable here that I want to spend a small assessment for the next 20 years to build a new network." But, in a small town that's been passed by- by everyone, I think you're going to have a substantial majority saying, "Yeah, we want to build and own our own network." If the majority vote to do that, whether it's build a new library or a new elementary school or repaving a road or running fiber to homes, I think that's a really survivable legal challenge."
Travis Carter: Doesn't it go back to our first conversation though? If the FCC sets the speed limit 25/3, now all your WISPS and all the other players can function. I mean, if they naturally set it at, I don't know, let's just say for conversation a gig, and all those dollars that are being pumped into these markets would have to go into fiber networks instead of these alternate networks.
Christopher Mitchell: There's sort of a misconception in this that, I think Dane, you're talking about towns that are like 50,000, 100,000 people. Those are where the FCC definition doesn't matter as much for these subsidies. But, we're running, so we have to go to closing comments here soon.
Travis Carter: The passion is so great here.
Christopher Mitchell: No, go ahead Dane. Just be aware that we're running out of time.
Dane Jasper: Yeah, I mean, I'm not trying to address markets where subsidies are available. If a market has no service and subsidies are available, and the municipality wants to apply for those subsidies or a carrier does. Well, then whoever has the best, lowest cost proposal should win those subsidy dollars. What I'm thinking about, Travis, you've got a market of 50 or 100,000 homes where the majority do have some level of service, but we all who live here agree that it's awful. That carrier needs to either step up and improve that network, or we, the majority, are going to vote to buy our own network. The answer isn't for the incant carrier to sue the city, it's going to be for the incumbent carrier to upgrade their network and convince the public that they don't want to take that risk and invest those dollars.
Christopher Mitchell: Also, [crosstalk 01:05:09]-
Travis Carter: Fair enough, fair enough.
Christopher Mitchell: Travis, don't forget that we're talking about, some of these cities are dealing with media con versus frontier. We're not talking about Comcast. We're not talking about the paradise of Comcast versus Century Link here. But then, the other piece of it is, also is Century Link is now doing this in Springfield, Missouri where the city has built a network. Not exactly the way that we've talked about, but nonetheless, the concept is strictly there.
Christopher Mitchell: So, there's a world in which Century Link, which should really be called level three at this point, which I guess has changed it's name to something else that's dumb [crosstalk 01:05:45]-
Travis Carter: [inaudible 01:05:45] or something now, right? Yeah.
Christopher Mitchell: [inaudible 01:05:46], yeah. It just reminds me of the Final Fantasy games that I love to play. Anyway, you can imagine a world in which a company like that starts to use this model then. So, the question ... Let me ask, is there any compelling points that anyone wants to make because I feel like we got to a point that I was expecting in terms of illuminating some of the differences important communities have to make and the fact that Travis will try just about anything just to get a sense of the empirical results rather than making his mind up ahead of time, which I appreciate.
Jeff Christensen: I'll weigh in with Travis that we build ethernet networks and not pon networks. So, I'm going to line up with you there Travis.
Travis Carter: Woo! There you go.
Jeff Christensen: We've kind of bounced back and forth between business model issues and technology issues. So, we probably should have divided this up between two different [crosstalk 01:06:37]-
Christopher Mitchell: We need a better host.
Travis Carter: I think what I'm hearing, the moral of the story is people are getting hooked up. All three of us are hooking people up, providing a better experience. I think the models are interesting. I guess because I'm swimming in debt, I'm always very careful to really be to gung ho about letting people overbuild us, not that they ever would, but there's always that potential fear.
Christopher Mitchell: I will just say, based on what you just said Travis, not enough, we don't have cities that are really trying what Dane is doing, and I think we should. Not because I think that I know which the best model is but because I would lik to see it in action, and I'd like to see it in aa couple of places. I think Jeff, I'm very excited because we're going to see the Ammon model in more places. It's being built today in at least three places, and we're going to see many more of those in coming years. I think we should have cities that are trying the way Dane is proposing it and then we can come back and look at the lessons learned.
Jeff Christensen: Yeah. I'm good with that. We'll come overlay our software after and then the silos will be broken.
Dane Jasper: [inaudible 01:07:40].
Christopher Mitchell: That is [crosstalk 01:07:43] about Dane's model, is you got to say, is that Dane's model decomposes nicely. You can do anything with that network once it's been built. I mean, if you want to change the way it's being done. You're not necessarily locked into a technology or a business model.
Dane Jasper: Well, you can imagine a scenario where it fails. No service provider shows up. Well, the city can then become sort of carrier last resort and light their own network and just deliver Internet over it, and it can become an APB in the end. So, there's really very little risk.
Christopher Mitchell: I think you're approaching malpractice if you put a shovel in the ground without having a kind of an anchor tenant, like you suggested.
Dane Jasper: Clearly. Yeah.
Jeff Christensen: Okay Dane, we'll see you in a year.
Dane Jasper: Perfect.
Jeff Christensen: All right.
Christopher Mitchell: Maybe we'll do this in person.
Jeff Christensen: [inaudible 01:08:27] application that argues for the complexity.
Dane Jasper: Yeah.
Christopher Mitchell: Thank you everyone. I've enjoyed this show. Judging from the chatroom I think people were intrigued. So, I really appreciate it, and I look forward to talking to you all in a year, maybe even before then about different things because you all have interesting points of views on lots of things. So, [crosstalk 01:08:48]-