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Holly Springs Finds Savings with Muni Fiber - Community Broadband Bits Episode 107
Holly Springs, a town of about 25,000 in the Triangle region of North Carolina, has built its own network to connect community anchor institutions and has an interest in using it to spur economic development and other community benefits but a 2011 law pushed by Time Warner Cable makes some of that more difficult. City IT Director Jeff Wilson joined me for episode 107 of the Community Broadband Bits podcast.
We discussed why they decided to build a municipal network and how they have just finished the actual build. We also discuss the savings they anticpate from owning the network and how local residents were hopeful that the network could be expanded to connect homes and businesses before learning that state law restricted them from doing that. Read our additional coverage of Holly Springs.
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Thanks to Waylon Thornton for the music, licensed using Creative Commons. The song is "Bronco Romp."
Jeff Wilson: We quickly determined that to do our own network was going to be cheaper and more beneficial for the community.
Lisa Gonzalez: Hi there, and welcome to the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzales.
Today, Chris interviews Jeff Wilson, IT Director for Holly Springs, North Carolina. In the summer of 2013, the Town Council voted to invest in municipal network infrastructure for anchor institutions. Unfortunately, state barriers in North Carolina prevent Holly Springs from offering network services to businesses and residents. Nevertheless, after careful consideration, the community determined that the investment would pay for itself by eliminating the need to pay incumbents for telecommunications. A year later, the network is lit and serving community anchor institutions, while saving significant public dollars. Even though state law precludes certain activities, Holly Springs hopes to encourage competition, via its infrastructure. The network is bringing free Wi-Fi to much of the town's green spaces. And Holly Springs is taking full advantage of its new asset, within the confines of North Carolina's law.
Here are Chris and Jeff, discussing the network in Holly Springs.
Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. And today, I'm speaking with Jeff Wilson, the IT Director of Holly Springs, in North Carolina. Welcome to the show.
Jeff Wilson: Thank you for having me.
Chris: So, Jeff, who don't you tell us a little bit about Holly Springs. Where is it located? What's interesting about it?
Jeff: Holly Springs -- it will soon be about 30,000 residents. And we're just right outside of Raleigh. We're in the same county as Raleigh, in the Triangle Region of North Carolina. We are very much a commuter community, with a lot of people who are employed in Raleigh and Research Triangle Park. And we have a lot of well-educated, very family-oriented residents.
Chris: Excellent. I've been through the Triangle a number of times. It seems like a wonderful place to live. Lots of trees. Very interesting urban design. It's a nice place to be.
Jeff: Yeah, it is. It's really lovely to live here.
Chris: So, one year ago, you -- actually, I shouldn't just say you -- but your town, your elected officials, voted to pursue a municipal fiber network that was going to connect the public facilities, the schools, the hospital -- the anchor institutions is what I'm trying to come up with in my head. Why don't you tell us a little bit about why that decision was made?
Jeff: Well, mainly, initially, we are providing services to our municipal buildings within the town. The decision was made when we started looking at what our data needs were going to be for the next couple years and looking forward long-term. And quickly started seeing an exponential increase in cost, with leased data services from incumbent providers. So we did the estimations, and we decided to investigate what it would take to do our own fiber network to connect our facilities. Our facilities aren't that far from each other. So we didn't think it would cost a huge amount to do that. So we started with a business analysis, where we hired CTC. I presented that to our Council, and they gave -- CTC and the Council gave us the blessing and the thumbs-up to go forward with the full business case -- and that's something that we should do. CTC, again, did the business case, and turned around, about a year ago now -- we had a return on it, with, even doing debt service on it, that would pay for itself in less than ten years -- on a very conservative ten years. And that was just using it for the town's usage. That wasn't even doing any dark fiber leasing or anything. And with that, the Council unanimously approved for us to move forward with this project. And we pretty quickly went out to engineering, and bid on the project, and started it on, actually, December 2nd, 2013. And we just completed it and lit it on June 17th.
Chris: Wow! So it was almost a year from the original decision then.
Jeff: Correct. We've had people who are amazed that we actually got that done that quickly. So it was a 13-mile network. It went from business case to design to being built in about a year.
Chris: Yeah. That doesn't happen north of the -- maybe the Mason-Dixon line is pretty close, I think -- where, you know, we don't do a lot of digging here in February or January here in Minnesota.
Jeff: No. We had a lot of bad weather this year. We did have some snow, but mainly rain caused us some delays. We probably were delayed a month, month and a half. But still within our timeline that we had hoped for -- to start disconnecting all of our incumbent-provided lines and moving forward.
Chris: One of the nice quotes that we saw when we were doing a little bit of research into it, when the original decision was made, is from Council Member Tim Sack, who said that not building this network was going to provide less than what we need and more than we can afford. Which I thought was a really good way of phrasing it.
Jeff: Yeah. He's been a really great proponent. The whole Council has been really great. The town needed it because of our data services. We're doing more and more public wireless, more and more remote security cameras at facilities. And just the data needs that our employees have, on a daily basis, to support the citizens and businesses in the town have exceeded those leased lines. And it just did not make sense any more to continue. It didn't not make sense to rent something that we could actually own, and have a return on that was pretty quick.
Chris: Well, could we talk about some specific numbers? I mean, one of the things we often hear from the existing providers is, hey, we already provide all this stuff, you know. We'll do fiber to you. Why is the business case more compelling to own it than to lease it?
Jeff: Well, we actually have fiber to all of our facilities through the current incumbent provider, but they charge a very nominal rate for the utilization of their bandwidth. When we started looking at the fact that what we needed to increase our bandwidth to, while at the same time, we felt comfortable -- town management requesting our Council for funding for, which was still less than what we actually needed for these facilities moving forward, we quickly determined that to do our own network was going to be cheaper and more beneficial for the community. And the network cost $1.5 million. And that was including all engineering and construction. And we were under budget in the ** too.
Chris: And so how long does that take before it breaks even, relative to what you had been paying for the slower services?
Jeff: If I took the amount that we needed today to Council for this budget year, each of those payments would pay the network off in approximately ten years. And that's not counting for, over future years, adding facilities to the network, not accounting for the faster data speeds needed in the future. So that could exponentially decrease the ROI, just based off the town's growth and the town's need. But again, we went very conservative on the business case. And I think that's one of the most impressive things about what we did -- and also working with CTC -- that it still had such a positive return for a future-proof asset.
Chris: And so one of the things is public Wi-Fi that you're doing a lot of. Where do you have this access set up for the public?
Jeff: We have it in almost all of our park facilities. Right now, we're working on kind of a hybrid solution, using our fiber and some wireless, to get to some pocket parks that don't really make sense to build fiber to.
But one question we did have a lot of when building this network: why not wireless, that's the new technology? But we are making a hybrid -- kind of a hybrid mix of those technologies. But we'll have it, and we're trying to get it into all our parks this year, including the pocket parks. And a lot of our public spaces, like the areas outside of the facilities -- kind of the concert areas, you know, the green areas between buildings and out in parks. And just trying to get it spread as much as possible.
Chris: In what ways are you may be changing your city policies so that over time you'll be able to add conduit as necessary, as part of other projects, to expand this network?
Jeff: We don't have any policies in place right now. And we've had some kind of general conversations about doing something like that in the future. Whenever our engineering department or public works are going to have an open cut for sewer or water replacements or additions, and it's a place that makes sense to add conduit, we'll have conduit in stock, and add that in, and put handholes to terminate those conduits. The other thing that we would like to do is work with developers. If there's an area that makes sense to add conduit when putting in a storm drain or add water and sewer for the town, whether we can work with them on having our public works staff come in at the same time, in that joint trench, and add the conduit. Or we can talk them into installing conduit that we may provide into those trenches. So, we are trying to go in that direction. We just don't have any kind of policies finalized. And it's definitely something that we're looking into.
Chris: So, under North Carolina law, passed in 2011, you're quite limited in how you can use your network to provide any services to non-governmental entities for a fee, basically.
Chris: I mean, you can do the free wireless hot spots, which is -- some states actually crack down on that as well, so you have a little bit of freedom there. But I guess the question is, how has this law changed your approach to building the network, or some of the things you might have liked to have done?
Jeff: One of the things that the law has done is, when we started building this network for our municipal connections, we had a lot of questions from residents and businesses: when can we connect to this network? Unfortunately, our answer is based on that law that we are not allowed to provide the services. And so what we do is we pretty much try to reach out to the providers in the area to find out what they're doing as far as innovation for residents and businesses. We have the ability, with dark fiber. And we definitely have a lot of extra capacity in our network, and could route it strategically through business districts and newer subdivisions, to be used by a private company who would be interested in reducing their initial infrastructure outlay cost. So we're definitely working -- and would love to be able to partner with somebody in the future, with that kind of situation, where we can do the dark fiber leasing. If we could provide lit services, it would be something that we'd look into. We don't know for sure if we would actually do that or not. Because that is a large undertaking, of course. But partnerships may be the key to make something like that happen, and to use the fiber network for private good.
Chris: How do people react, then, when you tell them that the state has told you that, even though you spent under $1.5 million in building this network, that you're not able to use it to, really, you know, supercharge economic development in all of the ways that you might want to? I mean, like you said, there's some options available to you, so it's not totally foreclosed, but.... But really, I mean, when we look at these networks, we see that if you can't offer lit services to businesses or can't very clearly make it as easy as possible for a partner to do it, then it's very difficult.
Jeff: Um-hum. Correct. And they have always asked me, what can we do to change that? So, we have a citizens' base who backs competition in the area, and faster connectivity at home, at an affordable price. Citizens and businesses have been extremely supportive of the network, from the initial stages, because they knew that it was a sign that the town is willing to innovate. Municipal fiber is not a new thing. There's a lot of communities around here -- our neighbors -- Town of Cary, Town of Apex, and even in Raleigh -- they do a lot of fiber. It's just how you approach it, with making it usable in the future for more than just a municipal connection. And that's what we've tried to do. And the residents seem to understand that, and see that, and back it. And we just try to make sure that we give the citizens some level of return by providing very good speeds for public wireless in as many places as we can possibly provide it, and continue growing that. And also providing more online services to the town, that they can use to make their interactions with the town and the community simpler, easier, and more efficient.
Chris: Excellent. Well, thanks so much for coming on the show, and telling us a little bit about Holly Springs.
Jeff: Well, thank you very much for having me.
Lisa: You can learn more about Holly Springs at muninetworks.org, or at the CTC website, ctcnet.us.
Send us your ideas for the show. E-mail us. You can reach us at email@example.com. Follow us on Twitter. Our handle is @communitynets. This show was published on July 15, 2014. Thank you again to Waylon Thornton for the music. The song is "Bronco Romp," licensed using Creative Commons. Thank you for listening.