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Collaboration Across the State Line, Idaho Falls and UTOPIA Fiber - Community Broadband Bits Podcast 390
Idaho Falls has had publicly owned fiber within the community for years, but until recently, limited its use to dark fiber leases and public power purposes. Now, the community is working with UTOPIA Fiber to expand the network in order to serve all premises with Fiber-to-the-Home (FTTH).
This week, General Manager of Idaho Falls Power and Fiber Bear Prairie and Chief Marketing Officer of UTOPIA Fiber Kim McKinley join Christopher to discuss the partnership. The project began with a pilot project but interest from the Idaho Falls community has proven that many people in the community want in on Internet connectivity from their municipal utility.
Our guests talk about the long process that led to their decision to work together and how they gauged interest from the Idaho Falls community. For both the city and for UTOPIA Fiber, this project is a new venture. Bear talks about some of the cost saving construction techniques the utility used, how they determined they wanted a partnership model, and the benefits the fiber network has garnered. Kim explains how, as an organization that aims to increase success for open access networks, UTOPIA Fiber was unsure what the future held in working with a community in Idaho, when the communities they serve had all been in Utah. For both partners, the project has opened doors.
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Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.
Bear Prairie: It's one of those things of if you build it, create the awareness and understanding, it starts to snowball.
Lisa Gonzalez: Welcome to episode 390 of the Community Broadband Bits podcast from the Institute for Local Self Reliance. I'm Lisa Gonzalez. In October 2019, Idaho Falls city leaders decided to move ahead with a plan to expand the municipal fiber network to residents citywide. They've enlisted UTOPIA Fiber to help them with the process in order to ensure the success of their open access approach. In this interview, Christopher talks with Bear Prairie from Idaho Falls Power and Fiber, and Kim McKinley who's representing UTOPIA Fiber. They discuss the partnership, the pilot project, and the decision to expand the use of the fiber that has served Idaho Falls for years. We learn more about the process community leaders pursued to be sure residents were interested in fiber to the home service, a little about how they select ISPs to operate on the publicly owned infrastructure, and the advantages the network has brought to the electric utility. Now here's Christopher talking with Kim McKinley and Bear Prairie.
Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. We're back in 2020. We're talking today to Bear Prairie, the general manager of Idaho Falls Power and Fiber. Welcome to the show.
Bear Prairie: Thank you Chris.
Christopher Mitchell: We also have a returning guest, Kim McKinley, the Chief Marketing Officer for UTOPIA in Utah. Welcome back, Kim.
Kim McKinley: Thanks. I'm excited to be here.
Christopher Mitchell: Bear, let's start with you, and tell us a little bit about the Idaho Falls area. I've actually flown into it twice, once on a very small plane, and I've driven through it and out through, I suppose that's Wyoming. And just a beautiful, lovely area. So tell us more about it.
Bear Prairie: Yeah, it definitely ends up being a recreation corridor certainly in the summer being in the entry point into Yellowstone because you can access the Yellowstone National Park through a couple of different ways from Idaho Falls, so it ends up being a nice stopover point. And a lot of people remember if they do stop through there, the wonderful river going through town and the beautiful falls that are there. But it's a population of about 65,000 people. It's the fourth largest city in the state of Idaho. So not a large city by any means relative to what you see in the east coaster and California, but one of the larger communities in the state of Idaho. But you're right on track. It is a gorgeous area and a nice place to be. And we also have a National Department of Energy lab, the Idaho National Laboratory, which is the leading nuclear research facility for the country. So interesting community.
Christopher Mitchell: And I think kind of an interesting population of I'd say more above average educated folks than one might expect because of the national lab. It seems like it has an outsized influence.
Bear Prairie: Yes, yes. I moved over to Idaho Falls from the Boise area about 10 years ago and it always has and continues to amaze me when you'll be out and about and the person next to you in the grocery store line is literally a nuclear physicist or rocket scientist, PhD from MIT. So there's a high, high IQ and education background within our community. So, certainly unique.
Christopher Mitchell: And some of our listeners will be familiar because Idaho Falls, you're the anchor to Ammon, which is kind of a bedroom community in some ways to you. And we've talked about Ammon before on this show.
Bear Prairie: Yep. Ammon's our neighbor just to the east that we share a boundary with.
Christopher Mitchell: And Kim you are down south of there quite a bit, but next door for western standards. So for people who, this is the first time ever listening to the show, what's UTOPIA?
Kim McKinley: So, UTOPIA Fiber is a open access network here in Utah. We provide fiber to the home in 14 cities and we provide business services in 50 cities throughout Utah, plus we are now doing a operational partnership with Idaho Falls. We like to brag about ourselves a little bit down here as the fastest growing open access network in the country. And we have just surpassed 26,000 customers and we have about 30 ISPs on our network in total.
Christopher Mitchell: Every time I turn around on your Twitter feed, it seems like you're turning on another 200 households within a neighborhood.
Kim McKinley: Yeah, we are passing about 1000 to 1500 new addresses a month and we currently have about over 100,000 businesses and residents that can subscribe to the service.
Christopher Mitchell: And then just for again, for people who are very new to this, your model is that you operate the infrastructure, but there's multiple ISPs that are competing on it.
Kim McKinley: Correct. So we believe the proper role of government is to provide the backbone or infrastructure, as we like to call it, of the fiber and let the private sector service providers run on our lines. It's worked. We started at this concept in about 2004. Our first customer was lit up in 2005. And we continue to grow at a record pace at this point, I think I mentioned earlier, but we are going to hook up approximately about 6,000 customers this year alone.
Christopher Mitchell: Yes, we're going to get back to Idaho Falls in a second, but I just wanted to note something that hopefully I think in three more years or so, we won't be making this note, but you are still accused of being a failure. And one of the things that we've seen is that you had dark days behind you, but right now the expansion is bright. You're doing great. Your unsecured debt at a good rate. So things are looking up.
Kim McKinley: Things are absolutely looking up. And I think that we did have some dark days in our past, but I think we've learned and I think that is what happens when you're a pioneer in this industry. We didn't know it. We didn't know at the beginning, but now I think we have a good track record and that we are, the sky is the limit for UTOPIA Fiber.
Christopher Mitchell: So Bear, let's talk a little bit about your history. You've doing the dark fiber for a long time as well, but tell us a little bit about how that's worked and how you got into it.
Bear Prairie: Sure. So Idaho Falls is also a unique community because we're one of the oldest public power utilities in the west. So we've owned and operated an electric utility providing service to the city since 1900. So we have long rich history of providing central services. In 1998, we had a need as the electric utility in high quality communication between our substation sites and our hydro projects and our office. And so we built a very limited fiber network. And then in 2001, we started having a deep conversation about additional needs around the city, different government needs, whether it be the county, the schools, the universities that have satellite locations in town, the Idaho National Lab, like I mentioned, had some needs. So as they approached us to say, "Can you guys provide the service for us to build this infrastructure," it made sense for us to continue to explore that.
Bear Prairie: So kind of one of those similar things, like Kim was saying, being a pioneer and out front. So we decided to build a 48 pair, 96 count fiber and dark fiber, three redundant rings around the city and get into the business of offering that service of leasing dark pairs of fiber to other entities. It was definitely something that there was components, and the community said, "There's no need to build that much fiber because you're not going to find people that are interested in leasing that. You're spending too much money." Others said, "It makes complete sense. Might as well put up more pairs of fibers than less on the initial build." So we ended up with the 96 count and a business plan of having it paid for in 15 years, and they're getting paid for and paid back in less than 10, and subscription rates took off really fast. So it's been successful on the dark fiber side for a lot of years.
Christopher Mitchell: And what kind of use was that? Was it primarily, for instance, commercial folks who wanted to connect their different campuses or buildings, or was it people who were using it to get internet access? How is it used often?
Bear Prairie: Right, a little bit of both. So we had businesses that wanted to connect different campuses around town. We had schools that obviously wanted to connect all their schools together and then connect those back into the larger public school segment within the state. And then we had providers come in and want to offer their retail service over our dark fiber. And so we would extend the network with point-to-point connections and then charge additional for each drop. So, the network really grew in a lot of different directions based upon the needs, but it allowed us to have that initial backbone in place to really organically grow with whatever area the community and businesses within it had a need, and internet providers had a need to utilize that infrastructure.
Christopher Mitchell: Now, for some electric utilities that have done that, it almost seems seductive in that it's a fairly safe business, especially once you're established, and you're able to bring in these revenues increasingly once you've done the connection for dark fiber without ideally really having to do much of anything. And so that's led some electric providers, the municipal electrics to say, "Well, why would we ever want to do anything more than this? It would be risky. We might be having to do more things outside of our core competency around having to do more marketing." You've chosen to leave the dark fiber, not leave it behind, but to go and be more aggressive. And so I'm just curious how that decision making came about.
Bear Prairie: Yeah. What happened is come the 2012, '13 timeframe and certainly leading into 2014 where we started to engage the public, we started hearing, "We have this great service on your fiber network at my office," whether it be attorneys or doctors or different individuals. And we had a few people that actually paid the money and had the build of the dark fiber network taken to their home. For example, we had some physicians that read MRIs at home and they wanted to have the access and they could certainly afford to put in that type of robust infrastructure. But the rest of the public was saying, "Why are we getting left behind? It's great at my business and it seems really affordable for business class internet. What can we do at the home and residential sector?" So we reached out and started to talk to people around the community about this need and started to really study what our options are in 2015 of whether we continue to invest and build more dark fiber or should we look for another type of build where we can extend it into the residential neighborhoods throughout the community.
Christopher Mitchell: And so this is, I think maybe where we get back to UTOPIA then. So were they one of the folks you reached out to?
Bear Prairie: Yeah. So I ended up reaching out to UTOPIA in 2015, '16 timeframe. Had really casual conversations. They were obviously the history of what their business model was before and how they've refined it and really figured out that secret sauce, how to make a open access, public network function properly and the economics work out. And at the same time, we were running a parallel track back in Idaho Falls of what we're hearing from the community. We commissioned a study to understand what our brand was, Idaho Falls Power, to potentially get in and be a lit fiber provider and go throughout the city. And then two, we held a number of open houses around the community in the high schools and elementary schools after hours, and really a listening session of is this something that the community wants to support and pay for and is there enough of a need there?
Bear Prairie: And the other thing, and we had a conscious conversation about this within our community and with our city council saying even by having these conversations, our hope was that potentially a different provider would come in and say, "We're going to build out a fiber network within Idaho Falls. It's okay. Government, step back. We'll take care of this for you." Because in that same timeframe, Google is doing a lot of things, but it just didn't happen. None of the other traditional telecom companies or other fiber type providers stepped up to say, "Let us build this infrastructure." So it became pretty clear to us that if we want to deploy broadband access throughout the community, we're going to have to look internally to ourselves to put this infrastructure in place.
Christopher Mitchell: And so while you're having that conversation, I feel like ...
Christopher Mitchell: Kim, I don't know if Kim was the one you were talking to or not, but, but Kim, I feel like are you having a conversation at UTOPIA about, you're looking at expanding significantly within the Utah areas that you're already operating in, but to be looking at moving outside the state seems like it would be pretty daunting.
Kim McKinley: Yeah. And at the time, and I wasn't part of those discussions, I don't think we were really looking to move outside of the state. We were looking to expand to our inside Utah cities and finish out the original cities who started this project. I think when the conversation started, we looked at it as a possibility. We weren't seeking the opportunity. It just kind of, the idea was put on our lap and then we just started conversations with Idaho Falls. And because what UTOPIA's mission ultimately is, is to help open access networks around the country succeed. On a daily, weekly basis we talk to a lot of cities and other things around the country in saying what we've done because we want to share our experiences and what we've done right and what we've done wrong. But I think when we were talking to Idaho Falls, it just kind of naturally progressed into a partnership.
Bear Prairie: Yeah. And I think a lot of that, Kim, I'll ping on there, are early discussions that we had. It truly was a little bit of a one off from what your normal model was in Utah because we already had these built in capabilities and successes and were already operating a very successful dark fiber network. UTOPIA was a great business partner from the start because they were saying, "We don't need to do everything for you guys that we do down here when we open up a new city or build a new part of a network. Let's really look at what you guys need and see if we can kind of move towards an a la carte and there's certain things that you guys have the capability to do. It makes sense for you guys to do that and keep operating this as the Idaho Falls fiber network because you guys have a good brand and name up there. Let's help you continue to grow and build and deploy this infrastructure."
Bear Prairie: It wasn't a here's our model, you have to take it. It was a true partnership of sharing lessons learned, what they've learned. They suggested different paths or options from what we really thought. A ton of critical consulting and insight that they offered for us on top of the just pure kind of backbone electronics that runs our network on the lit side.
Christopher Mitchell: Now what does it actually look like? Are you looking to them to say, "Okay here's a map of our town. Where should we put the central offices?" And things like that. Or what vendors should we be looking at? How does that actually work in practice?
Bear Prairie: What UTOPIA offered us is the sizing and location of the huts. The play between the, for example, you can put a hut here and pick up this many customers out of it. If you want to do more customers, you're playing this cost equation between another hut cost maintenance versus additional fiber. And instead of us trying to figure all this out from scratch, they gave us the, we've thought through this, we've worked through it. We've had a lot of learning cases the years, here's what we've learned, take it and use it. And if you guys want to change your design from what we do traditionally down here, you don't have to do it the exact same way.
Bear Prairie: That learning curve was vastly shortened and then we're able to integrate how they do things into what we already have for assets. For example, a number of our fiber hut locations, we already had space in substation buildings that already have the infrastructure in there and the HVAC systems and heating systems so we can leverage off of infrastructure that we already have in place for the electric utility to enable the cost effective deployment of fiber network throughout it.
Christopher Mitchell: And how will it work moving forward then? Will you be deciding which ISPs are operating on the network? Or how does that whole approach work?
Bear Prairie: Yeah, and that was one of the main tenets is we tried to figure out what business model and what approach to deploy if we do a citywide build a fiber. My belief is that Idaho Falls Power has a rich history of infrastructure in providing critical services. We are great at putting poles in the ground, putting wires and conductor in the ground and maintaining that infrastructure. What I didn't want to be on was the retail side of being an ISP. And there was some entities that said, "No, you got to be on the retail side in ISP to make these networks economically work." And I said, "I really don't want to be in that space. I want to find where I do the thing I'm good at. And then the for profit entities can come in and be the ISP."
Bear Prairie: It really is that public private partnership, which in Idaho and a lot of communities value. We weren't looking to put anybody out of business. We're trying to enable competition, enable access, enable ISPs to have infrastructure to utilize that they wouldn't on their own. I tell people, "Let the city and Idaho Falls Fiber build one road. And you guys choose whether you want to use UPS or FedEx to deliver your data packet." And we've proven a history of being successful at that. And that's where UTOPIA also had that same business model saying, "We build the infrastructure and then it's an open access network and let providers come." And you set kind of the terms as far as making sure that they're standardized packages, if they're turning 50 megs, they're actually delivering it. There's quality standards, but in that it's really a level playing field for capitalism to flourish and that's an important tenet in Idaho and my community to have that access for competition.
Kim McKinley: And the beauty from our perspective is that it's Idaho providers on the network thus far. Is that it's these ISPs we're already a business and now they are on the Idaho Falls network. Would that be correct Bear?
Bear Prairie: It is correct. Yeah. Because we had some providers that were looking at building their own fiber networks in certain subdivisions or what they commonly refer to as cherry picking. We didn't want those providers to come in start necessarily cherry picking certain areas of town because our city council was very clear and they didn't want to create a two sided community where there's areas that have access and areas that don't. It would be like water, sewer services, the way they view it and I view it too of you shouldn't have what is becoming a everyday more of an essential service where certain areas of town have it, certain areas don't. That was a key tenet for our policymakers to say it needs to deploy citywide if we find a business model that works.
Bear Prairie: Our concern was that with these current ISPs that they would come in and start cherry picking. Instead it was let us build this infrastructure and you guys will have a lot more customers all throughout the city to choose from. And at first they were concerned with having to compete but what has proven out since we've got the pilot done that their concerns were really unfounded and they found it to be a robust network where they can do what they're good at and what they like to do and compete on the data side of it without having to worry about the bucket trucks and the 24/7 call and all of that infrastructure that it takes to maintain a local network.
Christopher Mitchell: Yes. I often refer to a one of our repeat guests, US Internet, which is a provider here in Minneapolis and he sometimes when we're talking, he'll look at his phone and say, "Yeah, I had seven service calls yesterday." I get the idea that that on a fiber network, there's most days there's very few calls and then on a bad day there's probably hundreds. Better for you to handle that and let them focus on innovating and the figuring out just how to keep people happy with it.
Bear Prairie: Yeah, and that's a side for us, we can really get those economies of scale because we're out there with our linemen. If we have a car hit a pole or an ice storm come through or weather, we're putting the infrastructure back up, it doesn't take that much longer to also put the fiber infrastructure back up while they're there. It is an opportunity to deliver this infrastructure at a cost point that really nobody else could compete with us because we're already there doing it. There's no reason to move in a whole nother separate crew or separate people to do the same work further down the poles.
Christopher Mitchell: What happened with the pilot project?
Bear Prairie: We decided to do a pilot project to prove out some of our concepts and being an electric provider, we wanted to see if we can leverage the electric system, some of that electric infrastructure to help lower that cost. And with that, the pilot was going to prove out three different construction techniques, which was overhead, which everybody knows how that gets built out and it's pretty straightforward, but want to see if our linemen and electric side can more cost effectively hang up strand and deliver overhead service and what the price points would be for that. Then the real dynamic one was utilizing electric, existing electric conduit and putting micro duct in our existing electrical conduit coming out of the transformer and using our service lines that we already have in place to the house and coming out the power meter and then entering into the house at that point.
Bear Prairie: And then the other one is we have certain areas of town that have aging power infrastructure that was direct buried, that we needed to replace anyway. Let's just dig once and replace the power infrastructure and upgrade it at the same time and install fiber and bring that in service. And what we started that work in late 2018 and finished it up in August of 2019. This last August. What we learned is that especially the existing conduit that we have in the ground and utilizing coming out at the electric meter is we can deploy fiber for half the cost that it would take somebody to come in and do a greenfield construction installation. And the other thing that we showed the community and especially the customers are on it, is how robust and reliable the network we have and what it's like to have 250 meg or one gig internet service.
Bear Prairie: With that, it's that education awareness piece. Because some of our early discussions in 2015 with the community, a lot of people didn't know what a fiber connection was. They were like, "Why do I need this? What's it going to do for me?" Once somebody has it, then they get it. That's where the people that were very vocal in 2015, were I moved here from an area that I had fiber, I had really robust broadband access. We need this here. Other people are going, "Well I don't even know what it is, so why do we need it?" It's almost one of those things of if you build it, create the awareness and understanding, it starts to snowball. And that's the other thing that we've realized with the pilot project is building that awareness, that understanding to get the support from the rest of the community of this is good infrastructure to put in for our community.
Christopher Mitchell: Kim, I'm curious if at any point in with UTOPIA working on this, if you all got any new ideas. It seems like there may be some significant benefits to you to just see what other folks are doing as you're working with them.
Kim McKinley: No, absolutely. I think we've learned from our aspect of watching Idaho Falls and how they're doing it with the power conduit because we don't, we have some of our cities who are power cities, but we don't really experience that much. It's been a learning experience and we've been refining our model of if we want to do this again in another city and what we would do. Like bear said earlier, we kind of approached it with an a la carte. What does Idaho Falls want to do? And what is they want UTOPIA to do? And how do we split that from a revenue share or whatnot? And how do you go forward? I think it's helped us refine the model as we do more partnerships with new cities coming on board.
Bear Prairie: Yeah. One of the key tenets we had when we were discussing it with UTOPIA is I really want this to be a win win where we create economies of scale and it's good for UTOPIA and it's good for their existing members. It's good for Idaho Falls and our community and if we can find a way to do that a la carte service and create that win win synergy to bring these and deploy these type of networks throughout the region, let's focus on those type of situations. They were a great partner in that area.
Kim McKinley: Yeah, really it's been a great partnership from UTOPIA's perspective. Idaho Falls has been amazing to work with and it's been an honor that they chose UTOPIA to work with. We think we know a lot down here because we've experienced a lot down in our time, but it's been a real big pleasure for us to work with Bear and his team up there in Idaho.
Christopher Mitchell: Suddenly sounded like a Farmer's commercial there for a second with Farmer's insurance. And we know a lot because we've seen a lot.
Kim McKinley: Yeah. If anybody's seen things that can happen in this industry I think we've seen it and I think we probably experienced it.
Christopher Mitchell: Now, can a provider like XMission that's on all of your Utah networks, what's the possibility for them going up into Idaho Falls?
Kim McKinley: I think it's up to Idaho Falls of what providers they would like on the network. We will vet them and we will monitor all their services, but it's ultimately up to Idaho Falls of the service provider selection.
Christopher Mitchell: And so Bear, I'm curious, what do you go into when you're thinking about which service providers to
Christopher Mitchell: - Be inviting onto the network.
Bear Prairie: What we're currently looking for for providers is somebody that has a history of taking care of the customers when there's issues with their side of the connection to make sure that they have proper bandwidth and allocation so that when we're offering a product/they're offering a product, meaning if you're selling a 250 mb connection or a one gig connection, that you can deliver those speeds and we don't have service issues from their end.
Bear Prairie: Because it really is the partnership back with those ISPs because they have the same concerns as us of, "Well, what is your fiber connections or your electronics?" And so we want to make sure that they're a good business partner with a business history of saying, "No, our customers are happy with us. Whenever there's concerns or issues, our customer support side of it takes care of them and we're not putting the onus back on Idaho Falls Fiber." Because we don't want a poor service provider to cast a negative light on our network where they're playing the blame game of it's Idaho Falls network, it's not us, it's them.
Bear Prairie: So, we want it to be an honest, trusted partnership, which means they need to come with a bit of a track record and a history of taking care of the customers and operating in that area of an open access network and/or at least operating a network that's maybe an incumbent, which we have a couple of those that are traditional incumbents. This is their first foray into an open access network, but we want to show that they have a history and the call center and the support staff to take care of our community and our customers.
Kim McKinley: And what's thrilling to watch from a UTOPIA side is watching incumbent in Idaho Falls who want to be on their network. In Utah, we have some major providers here who have elected not to be on our network.
Christopher Mitchell: Not just that. I don't want to cast any aspersions, but back when you started, one of your significant problems was that some of the incumbents spent a lot of money to kneecap you through the legislatures. It's not just
Kim McKinley: That is a correct statement, Chris. They have not been as friendly in the past, but we always have hope for the future. We can't say anything. But to watch Idaho Falls and the incumbents come to the table and being willing to adjust their model and seeing that this might be a good path forward is exhilarating to watch from our aspect and we hope to see it replicate across the country.
Christopher Mitchell: That's one of the things, that's my impression. My impression is that if your incumbents said, "You know what? We've changed our minds, we'd really like to work with you now." I don't think you'd hold it against them. My impression has always been that your vision of competition is that that's the overriding thing. Not vengeance.
Kim McKinley: Absolutely. Absolutely. The incumbents in our area are always welcome to come and be on our network.
Christopher Mitchell: So, let me ask a final question. Then Bear, I'll ask if I missed anything. But did you face any illegal hurdles to be able to move in this direction? Because my understanding of Idaho law is that it is nominally a home rule state in which you are not categorically prohibited from doing this, but that the way it's been interpreted by courts has been a little bit more murky as to the authority of cities in this manner.
Bear Prairie: Where we landed is, since we have clear statutory authority to operate an electric utility and we had the need for the electric utility to continue to build out fiber, because that's the other component of this is we're able to leverage the same fiber infrastructure we're putting in place to deploy to residences and locations throughout the city to do distribution automation.
Bear Prairie: So, we can now put switches and automation on our power system to bring that into our dispatch center to where a power outage that might be an hour to an hour and a half is now going to be a five minute power outage. The ability also to back haul our electric meter information and provide electric consumption through apps and other other devices to customers interacting with them on their electric usage. Smart appliances, smart thermostats. So, the line between broadband, robust broadband infrastructure, and operation of electric utility is in-explicitly tied for us in our view.
Bear Prairie: Therefore we're building electric infrastructure that also has the ability with a lot of extra bandwidth for the customers to use and that's where they can pay for that fiber connection to their house, which is currently $30 a month. In January we're going to move that down to $25 a month for the actual fiber connection and they can utilize that for their internet service if they want. And then we reserve a portion of that bandwidth for our own needs for the electric utilities. So, that's where we have the statutory authority, which is different from other entities that might not have an electric utility that are municipality.
Christopher Mitchell: And so actually, I was remiss in spelling this out before, but that's the way it works for a homeowner's perspective, is that they have a construction or a fiber fee in addition to what a service provider would charge them.
Bear Prairie: Correct. It's a two part cost. So, they'll pay Idaho Falls Fiber for the connection. If they're connected to the network, if we pass by a home and they choose not to connect, they don't pay for it. And that was one of the key tenants for us, is those who utilize a service should pay for the service. And if you're not utilizing the service or taking the fiber service, you shouldn't have to pay for it. And that's a unique thing that's different than maybe some of the other networks.
Bear Prairie: And that's why we had to make sure that we could find a business model to get the price low enough that we can pass by every home and residence and business throughout the community and even if not everybody takes it, or even at a 50% or 40% or 30% take rate, that we're comfortable that this network will pay for itself and it doesn't need 80, 90% take rate and that's where we've drove the numbers down to a 30% take rate. We're good. Even as we continue to get these economies of scale going, that percentage will continue to drop.
Kim McKinley: And one note that I want to point out is that it is on a month to month basis. So, it's no longterm contract from Idaho Falls to the end use customer.
Bear Prairie: Yeah, we really want our network to stand on something. We had a lot of discussion internally. Well, should we do contract? Where I ended up landing is, if you offer a superior product and superior service and take care of the customers, they're going to come and they're going to stay. And conversely, what we've seen with the pilot out of the 1,350 that we pass by, we're over 400 connected now and that's eight months of time. And some of the latest ones were only able to be connected here last two, three months.
Bear Prairie: So really great take rates. And I think we've had two people disconnect from the network that originally signed up. So, our stick rate is almost 100%. So, I think it's a Testament to if you offer good product, take care of the customers, they'll stay there. And then they have the $30 charge from us, soon to be $25 charge, for the infrastructure. And then for the ISP side of it, our lowest cost provider at 250 mb is $35 a month. So, for all in currently $65, it really is a good product that people are able to have access to.
Christopher Mitchell: It definitely puts you in a very high national ranking. In terms of price for speed, what is the timeframe of your citywide build-out?
Bear Prairie: We made the decision, I say we, the city council, made the decision in October after looking at the economics and hearing from the public that are currently on the network and others of what's the experience with the pilots? Is this something that people want? Is the need there? And what do the economics look like? Everything looked positive from the business case perspective. The community support was there. So, the city council said, "Let's deploy this citywide."
Bear Prairie: Our plan is it's a four year to five year build out, a lot of the easier areas and lower hanging fruit we can pick up a little bit faster. So, my vision and our current construction plan is when you come back to Idaho Falls three years from now, we will have about 80% covered and then that last 20%, certainly some of the tougher areas and harder construction techniques, we'll pick up over the next year to two years.
Bear Prairie: But by the end of five years we'll have every residence and business passed in the city and be able to offer that service to them. And at the same time, we also made the decision we're going to continue to operate and lease out the dark fiber because I view it as they are different needs, and some businesses need those point to point connections or the robust of having on a ringed connection.
Bear Prairie: So, we're going to continue to offer that service and maintain that network along with offering this additional service because it's not a one size fits all solution in this space for offering broadband. I think that's the biggest lesson I've learned over the last couple of years. Digging into the broadband industry. There isn't a one size solution for any community or one area. It really is innovating and trying to find solutions for your local problems.
Christopher Mitchell: Great. Is there anything else that we should finish up with?
Kim McKinley: We're excited about this partnership and we just continue to watch Idaho Falls Grow and finish building out the Utah cities here.
Christopher Mitchell: Right. I think it is worth noting, and if anyone who's listening, I think you always worry that if you're working with someone outside of town, when inside of towns not finished, there's a concern of what your priorities are. And I think it's important to note that when you have the skill set you do with UTOPIA, we've seen this with some other munies as well, it really makes sense to put a little bit of effort into consulting because the revenues will only help you to build out more rapidly in the areas that you're committed to locally.
Kim McKinley: Absolutely. One of our missions here at UTOPIA is to help open access networks thrive throughout the country and we're starting to see them pick up and we can only hope that they continue to grow because I think it's the proper role, as we believe it's the proper role of government versus the private sector.
Christopher Mitchell: Well, thank you so much. That was Bear Prairie. Thanks for being on the show.
Bear Prairie: Thank you, Chris. Appreciate it.
Christopher Mitchell: And Kim, it was great to have you back on again.
Kim McKinley: Thanks Chris.
Lisa Gonzalez: That was Christopher with Bear Prairie from Idaho Falls Power and Fiber and Kim McKinley from UTOPIA Fiber about the city's expansion of its fiber optic network. We have transcripts for this and other podcasts available at muninetworks.org/broadbandbits. Email us at email@example.com with your ideas for the show. Follow Chris on Twitter. His handle is @communitynets. Follow munienetworks.org stories on Twitter. The handle is @muninetworks. Subscribe to this podcast and the other podcasts from ILSR, Building Local Power and the Local Energy Rules Podcast. You can access them anywhere you get your podcasts. You can catch the latest important research from all of our initiatives if you subscribe to our monthly newsletter at ilsr.org. While you're there, please take a moment to donate. Your support in any amount help keep us going. We want to thank Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons. This was episode 390 of the Community Broadband Bits Podcast. Thanks for listening.