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Fairlawn Focuses on Citywide Gig Infrastructure - Community Broadband Bits Podcast 201
On the outskirts of Akron, just south of Cleveland, the community of Fairlawn is building a citywide wireless and fiber optic network using an interesting model. Most of the citywide municipal Internet networks in the U.S. have been built by communities with a municipal electric power company. Fairlawn has no such utility, not even a water utility. So they have partnered with another Ohio company, Extra Mile Fiber. This week, Deputy Director of Public Service Ernie Staten joins us for episode 201 of the Community Broadband Bits podcast to discuss their approach and goals. Fairlawn is building a carrier grade Wi-Fi and fiber-optic network, financed by municipal bonds. They will own the network and are focused first on generating benefits for the community and providing essential infrastructure rather than making sure every dollar of the network is repaid solely by revenues from network services. We also discuss how they structured the revenue-sharing arrangement with Extra Mile Fiber.
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Ernie Staten: Here, in the city we don't charge for any infrastructure that we build in the city. We are going to charge for the service, but we are not going to charge for that particular infrastructure.
Lisa Gonzalez: Welcome to episode two hundred, one of the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance, I'm Lisa Gonzalez. We regularly use the term, essential infrastructure, to describe Internet networks. For years experts and everyday people have compared the Internet to something as basic and necessary as the streets we drive on. In this episode Chris talks with Ernie Staten, deputy director of public service in Fairlawn, Ohio. The city recently announced, that it would bring better connectivity to it's community with a publicly owned network. In this interview, Ernie explains how the community is embracing the philosophy of Internet networks as essential infrastructure. As they move a head with their fiber optic project. Learn more about the new network at FairlawnGig.net. Now, here's Chris with Ernie Staten, deputy director of public service at the city of Fairlawn, Ohio.
Chris Mitchell: Welcome to another addition of the Community Broadband Bits Podcast. I'm Chris Mitchell, and today I'm speaking with Ernie Staten, the deputy director of public service at the city of Fairlawn in Ohio. Welcome to the show.
Ernie Staten: Thanks for having me.
Chris Mitchell: Absolutely. Let's talk a little bit about Fairlawn, just to get going. Tell me what is Fairlawn like? How big is it? Where is it located? That sort of thing.
Ernie Staten: Fairlawn is in Northeast Ohio. We're a suburb of the city of Akron. Roughly, twenty minutes south of Cleveland is the Akron, Fairlawn area. The population here is seventy-four hundred people, in the evening, and at night, but during the day we have quite a bit of business here in Fairlawn, and during the day we reach somewhere around forty thousand people that are actually in the city. I guess, what a lot of people would say is a bedroom community, where not much goes on at night, but during the day it's a pretty busy place.
Chris Mitchell: Wow. When you were first describing it, I was kind of imagining that people were going elsewhere for work, but it sounds like a lot of people come in to work.
Ernie Staten: That's right. Yeah. We're a destination, I would say, we have a nice mix of retail, and office space. We have the basic mall and the plazas, and restaurants, but then at the same time we have quite a few class A office buildings here, in the city. That was a big driver of the idea of FairlawnGig.
Chris Mitchell: Let's talk about FairlawnGig. What do you have in mind to do?
Ernie Staten: FairlawnGig is a combinationj of fiber optics to every home, every business, and Wi-Fi, a city wide Wi-Fi, which will be a carrier agreed Wi-Fi, at some point, initially, during the build it's going to be a free Wi-Fi, more like a hot spot. Over time, it will become carrier grade, where we can actually sell service off of the Wi-Fi. The big piece of it is obviously putting fiber optics into the entire city. We are going to be able to serve every resident, every business. We are going to sell phone service, Internet service, and then, we stayed away from the idea of having a video service with it. What we are doing is, we are trying to educate people here in the city. If you wanted a TV service where it's a bundle type service, you could go with a Dish Network, or Direct TV, as part of our service, or you could do some of the over the top services that are out there.
Chris Mitchell: That sounds like the city of the future. To have the Wi-Fi, a good wireless product and then a really great connection to every home. I think, I saw, you have the pricing already set up in terms of what you are going to be charging for capacity for the wired service. Don't you?
Ernie Staten: We do. We will set up with the Wi-Fi service plans, once we're built out, and it's robust enough. With the Wi-Fi, the one issue that we were afraid of is, we cannot build out the entire city at once, so our idea was, once were completely built out with fiber we will be able to back all that Wi-Fi, so then we'll have a real system, but yes, right now we have the service packages. For residential, we are offering one gig of service for seventy-nine, ninety-nine, and we're also offering a one gig of service for business for five hundred dollars.
Chris Mitchell: I think, you are going to offering a couple of other tiers, also, just so people don't have to only take a gig? Right?
Ernie Staten: That's correct. We're hoping that most people take a Gig, one comment that we heard early on is, from some of the residents, and some of the businesses, I don't need a Gig, but most people feel they don't need a Gig because they've never experienced a Gig, so it's all relative. We're expecting a lot of people to switch over at some point. We are offering packages of one hundred Meg, and fifty Meg package in business, and a thirty Meg package. All these packages are symmetric, so the thirty we actually started out with that one, saying, thirty, thirty, thirty, would be thirty in, thirty out, and thirty dollars a month. Which I think, is a package that a lot of people probably will take residential, will end up taking, but we'd like to gear towards the one Gig package.
Chris Mitchell: I'm sure. Absolutely. Tell me a little bit about the service that was available beforehand. I am presuming that you had something available, but maybe it wasn't meeting your needs, locally.
Ernie Staten: We did. We have two incoming careers. The city of Fairlawn it's a little strange, because we're split by the two old bell system, phone systems. The center of our city is West Market Street, Route eighteen, that's the main thorough fair through Fairlawn, on the north side of West Market Street we had one phone carrier, south side we had another phone carrier, so they still honor those agreements and they don't cross, so we were left in a situation where we were kind of an edge type city. They weren't interested in building more infrastructure in the city. We actually asked them from the very beginning are thought was that we would just go to them and ask them to do it, and hopefully we would help out with bringing in better service. When we decided to do this, we averaged in the city, that we had fifteen download, and one upload, and that was business and residential.
Chris Mitchell: That's rough in this modern climate of everything being digital.
Ernie Staten: Correct. The upload was actually more of the complaint, because of all the things that now, people are sending these pictures, and doctors working on different things, they couldn't send was the biggest complaint. At the same time, our mayor, joined a Northeast Ohio group that is trying to bring business in to Northeast Ohio, so they go to trade shows in Germany, and Japan, and China. When he went to those trade shows, everyone talked about how great the Northeastern Ohio is for land, it's relatively inexpensive for land, and we have water, but we don't have any broadband capabilities. So, while that was going on, that changed us to start looking into what could we do internally. Here we are.
Chris Mitchell: One of the things that struck me about Fairlawn is that you do not have a municipal electric utility. I'd like to know a little bit more about how you structured it, and then how you got the advice to go in the direction that you have.
Ernie Staten: You're correct. We don't have a municipal utility. We don't have electric. We don't own the water that's in the city, actually the city of Akron, we get the water from city of Akron, so we didn't have a back office, and that was a big piece to building this. We had the idea, obviously, that we felt we could put up fiber optics in, we do a really good job here in the city of constructing infrastructure, even though, we don't build for it. The idea came, we felt we could build it, and we felt we could go and find the right people to engineer it, but we also needed that piece, that anyone that had electric or any other utility they would already have it, we didn't have a marketing team or a back office where we could bill. How we handled that on our end, we actually have, we put out a RFP for a service provider. That would act as FairlawnGig, and that service provider will handle the retail. They'll handle wholesale. They'll do the marketing. They'll do the billing. All of that will fall under the city of Fairlawn, actually under my control, but their doing the work. Then, they're doing it as a business. The deal that we have in place is that fifty-five percent of all revenue would come to the city of Fairlawn, forty-five percent of all revenue will go to the service provider.
Chris Mitchell: Who is that service provider, that you decided to work with?
Ernie Staten: We decided to go with Extra Mile Fiber, out of Dayton, Ohio. There were numerous reasons for that, but I can tell you one large reason. What we found out is, because this is a different business model, we needed to go with a company that was a little more, a smaller company, not someone that already has this large business model in place, and has to follow it. We initially thought that we would go with a larger provider. We just were never able to work that out. The second piece to it is, we wanted to go with someone that was in the state of Ohio, because we wanted the call center, and all customer service, to be handled in the state of Ohio. We didn't want a situation where you call in and then you get put on hold, and your talking to someone in Texas, that doesn't have an idea of where Fairlawn is at, or what needs are in Fairlawn. So, we fixed both of that.
Chris Mitchell: Texas, might even be a stretch. I think, a lot of times when I call those companies I'm just glad to get someone in the United States.
Ernie Staten: You're correct.
Chris Mitchell: What does Extra Mile do? What did they do before they started working with you? I had not heard of them before.
Ernie Staten: They do a little bit of the same process in the city of Dayton. They have two or three projects around the city of Dayton. The owner of Extra Mile has been in Cloud based data employment for quite some time. That lead us to him, and he actually answered our initial RFP, and at the end of the day, we decided to go with, Fujitsu to build, but we were always interested in him, because he has some great retail ideas. So, we're hoping that we captured the best of both worlds by having this larger company, Fujitsu build and design it, and have Extra Mile run the retail. Lee Sandy is the name of the owner of Extra Mile.
Chris Mitchell: One of the things that you mentioned is that you will be splitting the revenues. The city gets a little more than half. Did you say fifty-five percent?
Ernie Staten: That's correct.
Chris Mitchell: Then, the service provider will get the forty-five percent. Would you say that, your project needs to break even, financially, for it to be a success, which is to say that the bonds that you are issuing would have to be repaid solely by the revenues of fiber project?
Ernie Staten: No. That was not our goal. Early on I went to the mayor and council with the idea that, here in the city we don't charge, or we don't access, or add taxes for any infrastructure that we build in the city, so if you have a road in front of your house that needs replaced, and the city of Fairlawn replaces it, we don't charge for that road, or waterline, or whatever the infrastructure that we would take care of. I went in with that same idea. We should not be charging for the infrastructure, we're going to charge for the service, but we're not going to charge for that particular infrastructure. Saying that, we knew all along that it would be difficult to pay back bonds. Now, we hope that we are successful enough that in the later years, we are paying back the bond, but during the initial years, we were focused more on paying for the maintenance, and any additional work that needs to be done. We're focused more on taking care of the maintenance, and refresh, and then paying debt, because the city of Fairlawn, we were able to put the bonds out, and we were able to do fairly well, that we put out ten million dollars, and we are a little less than six hundred thousand dollars that we are going to take out of general fund to pay for it.
Chris Mitchell: That's refreshing to hear that, because I've been expecting to see more cities doing that sort of thing. It's been a lot of years in which elected officials will talk about this is an essential infrastructure, but they have not been treating it like an essential infrastructure the way they pay for it, a lot of times. I would congratulate you for focusing on it as an essential infrastructure. One of the other things, that I find really interesting is that, you're not only building within your boarders, right? I think, you are actually going to be doing some economic development work, outside of your own city?
Ernie Staten: That's correct. We have a JED, which is a joint economic district. At the end of the day, the reason for the JED, is it stops annexing because you are providing water. It's a very good deal for both communities. There's no issue that the outside community would be afraid that the city would annex, and the city doesn't have to go through the process of annexing. We have to go through the process of getting them water. I said, earlier we don't own the water, that's why it's considered, Akron, Fairlawn, and Bath JED. The reason why we chose that is, legally we should only be paying for something that we are actually getting some type of tax money from. We should not be trying to go outside of our boarders, until we can reach an agreement with everyone outside of the boarders. We knew that we could develop this joint economic development district, because we get the taxes fro them, but at the same time, we felt it was essential that this joint area, because of the business that they had to be involved with it.
Chris Mitchell: One of the things that I found really inspiring working in this area, is seeing how building this infrastructure of the future, can bring cities together. We've seen cities that have a history of trying to lure companies from nearby cities in to their community with tax breaks, and things like that. That's what I think of, a lot of us don't like to see that sort of thing, but when it comes to broadband, we see a lot of times, cities working together as a region. I think, that's the legacy that we want to see. Can you just tell me a little bit about, a little bit more about how that plays into, why it's important for everyone to have a good access, and not just cut them off at the borders of Fairlawn?
Ernie Staten: I think, it goes to the whole idea that the mayor joined a group to bring business here, into Northeastern Ohio. He didn't join that group to bring business into Fairlawn, which he joined it because all of Northeast Ohio needs to do a little more marketing, a little more sharing, bringing in business, so naturally, I think, this whole idea of FairlawnGig will take off around the whole area. I just had to send of our flyer to one of the businesses here, out of the four quadrants of the state, we were ranked the lowest, in broadband connectivity, again, we probably should be looking into bringing this to the whole region. Since we've addressed it with council, and council approved it, a lot of cities around us have been reaching out to us, talking about how we could potentially grow this network, and help them with their network. It's a region that needs help. It's not just one city, and we're not looking at it that way.
Chris Mitchell: I guess, the final question that I would like to ask you is, do you have a sense that people are supportive of this? Is this something that people stop you on the street to talk about it? How do you have a sense people are reacting?
Ernie Staten: Throughout the process, we did multiple surveys. We have a compactor system, here at the city of Fairlawn. We have eighty-five percent of all of our residents bring their trash to my complex and put it into a compactor. We don't go and pick up the trash, they bring it to us. That piece says a lot about Fairlawn, but it also gives us the opportunity to reach out to our residents, because again, eighty-five percent of the people are coming there. We were able to do surveys there, we were able to talk to quite a few. The compactors residential, so the businesses, we did a lot of walking, going to the Chamber meetings, and just discussing with them to see, yes, are we on the right page, here, and we found out, all along, that we are on the right page. Overwhelming, on the right page. The last survey that we did, we surveyed four hundred people, that went to the compactor on a Saturday, and ninety-seven percent of those people wanted to see something happen where they could get better connectivity, that really catapulted us into, that we have to build this, we're on the right page. Thirty days ago, actually the referendum period, ended, yesterday, thirty days ago council approved it, and we launched our website, and sent flyers out to the community. In those flyers we gave a website address that if you were interested in continuing to learn about FairlawnGig, because we don't know exactly where we are building one hundred percent, to everyone, when they'll get it. So, we didn't want to have the sign up, yet, we wanted to have people, just get a newsletter. Where over five hundred people, in less than a month without doing any construction, that have signed up to say, that we want more information, and most of those more information have been when can I have it? How soon can I get it? It's been a great response. I said earlier, we have seventy-four hundred people in the city, where you started out in the first month with five hundred people that have basically signed up, and again, we haven't put a shovel in the ground yet. Now, the end of May we will have a shovel in the ground, that's pretty massive, I think.
Chris Mitchell: Yes. It sounds like there's a lot of support for it. Is there anything else that you want to tell us, about the project?
Ernie Staten: We're having a press conference, today, to say that we are officially going to construction. We made it through all of the approval process. We received the money to do the project, and we have the contracts in place to go do the construction. Secondly, we are planning on taking our first step in building towards the Hilton in Fairlawn, the Akron, Fairlawn Hilton is the longest privately owned Hilton in the world, and the gentlemen that owns the Hilton has been a big proponent of what we are doing here. I've said all along, the best test place that you could ever have is a hotel, because you have so many business people coming in, trying to work from their rooms, and I'll give you a small quote that he has given to me over, and over, and over again, and I'm sure he'll say it here today at the press conference, his quote is always, "I can turn the hot water off, today, and I'll get less complaints than I do about the Internet."
Chris Mitchell: I absolutely believe it. Yes.
Ernie Staten: Yes.
Chris Mitchell: Yes. I'll tell you I've long been wanting a service that would just tell me, like when I am searching for a hotel somewhere, if I knew that, that hotel had high quality Internet access, I would easily pay an extra twenty or thirty dollars a night for the ability to stay there just to not have the uncertainty of having bad hotel connectivity.
Ernie Staten: Yes. Agreed. I think, going to these conferences, that I've gone to it's pretty amazing that I didn't realize that some hotels, it's just poor quality. This hotel will have the best of the best, we believe.
Chris Mitchell: That's wonderful. Thank you, so much, for telling us more about Fairlawn, and your project.
Ernie Staten: Okay. Thank you.
Lisa Gonzalez: That was Chris and Ernie Staten, deputy director of Fairlawn, Ohio's public service department. Check out our stories on Fairlawn, at MuniNetworks.org, and learn more about the project at FairlawnGig.net. Send us your ideas for the show, email us at podcast at MuniNetworks.org. You can follow MuniNetworks.org's stories on Twitter, where the handle is at @MuniNetworks. You can also follow Chris on Twitter, his handle is @communitynets. The transcript for this, and other Community Broadband Bits Podcast is available at MuniNetworks.org/broadbandbits. Thank you to the group, Forget the Whale, for their song, "I Know Where You've Been," licensed through creative commons, and thank you for listening to episode 201 of the Community Broadband Bits Podcast.