Modest Investment Yields Results in Steamboat Springs - Community Broadband Bits Episode 163

When Steamboat Springs resolved to improve Internet access for key community anchor institutions and businesses, they decided to make an economical investment in a carrier neutral facility to allow multiple ISPs to invest and compete with each other. In episode 163 of the Community Broadband Bits Podcast, Tim Miles explains what that means and how they did it. Tim is the Technology Director at Steamboat Springs and South Routt School Districts in Colorado. 

He tells us about the poor connectivity the community had from CenturyLink and how they opened a bottleneck to encourage more investment. In part because of how Colorado limits local authority to build networks, they formed the Northwest Colorado Broadband Cooperative with the local Chamber of Commerce. They are already seeing benefits in the form of lower prices for anchor institutions and reduced outages - Tim describes just how painful those outages had been when there was no local Internet choice. 

This show is 20 minutes long and can be played on this page or via Apple Podcasts or the tool of your choice using this feed.

Transcript below.

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Thanks to bkfm-b-side for the music, licensed using Creative Commons. The song is "Raise Your Hands."


Tim Miles:  And the only reason we're doing this is 'cause we were waiting for the incumbent to meet our needs and they weren't doing it.  'Cause, according to them, we weren't big enough.  We're doing this not to connect the community but to provide a good opportunity for anyone who's in that business to connect the community, and just use our assets -- at a reasonable, fair cost.


Lisa Gonzalez:  Hello, and welcome to Episode 163 of the Community Broadband Bits Podcast.  I'm Lisa Gonzalez from the Institute for Local Self-Reliance.

Tim Miles, Technology Director at Steamboat Springs and South Routt School Districts, talks with Chris in this episode.  Steamboat Springs is a resort community that's invested in an innovative way to make connectivity more affordable and more reliable.  Several local anchor institutions have collaborated to develop a carrier-neutral location, a place where providers connect to each others' networks to bring outside Internet to their customers.  Steamboat Springs carrier-neutral location has resulted in significant savings for the school district and other anchor institutions.  And Tim explains in the interview exactly how.  This resource has also created redundancy and reliability that did not previously exist.  Tim describes how past failures from past providers have caused millions of dollars of damage to the local economy, and how the carrier-neutral location has all but ended such catastrophic failures.  In fact, the carrier-neutral location has opened up new opportunities for Steamboat Springs.  Now here are Tim and Chris.


Chris Mitchell:  Welcome to another edition of the Community Broadband Bits Podcast.  I'm Chris Mitchell.  Today I'm speaking with Tim Miles, the Technology Director at Steamboat Springs and South Routt School Districts.  Welcome to the show.


Tim Miles:  Thank you.


Chris:  So, I first learned about Steamboat Springs -- I think it was maybe a press release, or perhaps it was last year at Mountain Connect, in Colorado.  And you're doing this really interesting carrier-neutral facility investment.  But I think what I want to start with is asking you, you know, tell us a little bit about Steamboat Springs, and how it's known to the world.


Tim:  How it's known to the world -- I guess it's really known for its powder skiing.  And tree skiing.  We have really excellent tree skiing here.  But, more than that, we're a destination resort.  Our schools are ranked in the top five in the state.  It's a great recreation and ranching community.  So, how I ended up here was that -- I got told, was that the ski mountain could go away and Steamboat would still stay as a vibrant town.  Whether that's true or not I don't know, but that's what I got told.


Chris:  Well, I've heard it's incredibly beautiful.  So I can imagine that people would still want to just come and watch and look around.


Tim:  Yeah.  It's a plateau valley, they call it.  It's a really high-altitude valley.  So it's really lush and green.


Chris:  So, in our world, I think it's really interesting that you've decided to do a carrier-neutral approach.  And we've talked about this kind of approach a little bit in the past with Hunter Newby, who runs Allied Fiber, and has told us a lot about what he's doing.  But maybe, for people who missed that show, you can remind us.  What's a carrier-neutral location?


Tim:  The carrier-neutral location is a --  If you want to choose Comcast at your house, then you have to pay their rates.  And they get to charge rent.  Or maybe they choose not to pay rent on that -- on that distance for your line.  And if you want to do another carrier, it's the same thing.  So, it's really based on how well you are as a negotiator.  And so, a carrier-neutral location is, all -- we have all those vendors in one room.  And so, if you can get connected to that room, then you pay the aggregated rate that we negotiated on there.  So, we pay that rent once.  So, the more people you get served from that room, the less the cost for everybody.  And any carrier can be in that room.


Chris:  I often think of it in terms of -- and I don't know if this is -- maybe I'm thinking of it more nefariously than it has to be, but -- I often think, you know, you have the established providers, and they want to do everything they can to lock out the competition.  And I think of the carrier-neutral facility as a way that you can basically build it and then have unlimited competition -- you know, however many people can fit in that room, basically, can all be competitors.


Tim:  Correct.  So, in our case, we have a carrier in that room that runs over two carriers.  So, we don't have to deal directly with each carrier.  We just have to deal with that one carrier.  And then he can go one direction over one carrier and then go another direction over another carrier, which gives us redundancy.  We don't have to deal and negotiate with each vendor individually.  Because one of the vendors chose not to serve that room.  Although he's serving it for the school districts' needs, he won't serve it for the vendor-neutral idea.  And that was the incumbent, who had control of this market.


Chris:  This is something that, it seems to me, was -- mainly, from what I can tell -- the largest benefits that were known about in advance was that it would benefit the schools and the county.  Explain a little bit more about how that's the case.


Tim:  Well, the school had the need.  We had the need, just like the large school districts down in the urban areas.  But our costs were ten times higher than them.  So when they were at $10 per meg for Internet, we were $100 per meg.  So, they were getting a gig of Internet, while I was getting 45 megs for the same cost, roughly.  And so, when we started coming together, I didn't have the political power to negotiate with these people.  Even though I had the need, I didn't have the political power.  So I approached the city and the county and asked if they would want to partner and share Internet.  And they said sure.  And so, once the city and the county and I started sitting down at the table with that same provider, I got their attention, because the city and the county get that, where I don't, from the political side.  Just us three are getting service from that room today.  However, having that room has lowered the price for everybody.  But we're expanding that room to include our other core members, which include the Yampa Valley Electrical Association; as well as the Yampa Valley Medical Center, which is the hospital; and the community college -- Colorado Mountain Community College.  So we're all the anchor institutions.


Chris:  What does a room like that really require?  When you say "expanding" it -- I mean, do you, like, have to knock down walls, and make it bigger?  Or, what -- maybe you can start off by telling us what it was like, and what you have to do to expand it.


Tim:  It was an old boiler room.  And, basically, we chose my facility, because it was the closest to the CenturyLink central office.  And, the way I understand it, by law -- with the current laws that are on the table now -- any middle mile provider has to drop off their location -- drop off at the central office location of the incumbent, which is CenturyLink in this case.  So I was the closest to that.  So what we ended up doing --  The room doesn't really need that much.  And if you walk in the room, you're going to be rather overwhelmed -- or, underwhelmed, because it doesn't take much to run the Internet.  It's just basically a switch, and that's it.  But they'll have you believe there's a huge cost to it.  But there really isn't.  And so, what we ended up doing was, we took over a room which was an abandoned room here, in my facility.  It was an old boiler room.  And we put a new floor in, and took out all the old, dirty stuff, and made it a computer room.

And it has five vendor-neutral cages in it.  We made fiber connections from that room all the way down to the CenturyLink central offices.  So, now we have a direct connection to the central office.  So there's no bottleneck from the Internet to us anymore.  It can free-flow right through CenturyLink and right to us.  Or, we can get it FROM CenturyLink, if we chose.  That's the better route on the negotiations.  But, apparently, it flows through them right to us.  And we have cages, that any vendor can put their own stuff in and lock it up and feel safe, that night when they go home, that no one can get into their stuff.  And that's currently how it sits right now.

So, I use part of that room right now for my computer room, for the school district.  And then the cages are rented out, as well as, that fiber's rented out, per the mile.  Regardless of what you do with it, or how much speed you want to put over it, it's your fiber, if you rent it.  So, we have Mammoth Networks in that room today.  EAGLE-Net in that room today.  This company called Phoneswest is in that room.  We're piloting with another company who does international video conferencing.  So, they were having to travel to Denver.  Now they don't have to travel.  And now they get to sit right on the head of the Internet, in theory.  They're providing their services out of that room.

And when I say expanded to add the city and the county, all it is, is, how can they connect their wires, that they own, from this room to their facilities?


Chris:  So when you were thinking about how to solve your problem of paying so much more than your -- other school districts around the state, what did you look at?  Did -- was there another community that inspired you?  Or was it just something that you thought, well, this is the obvious solution?


Tim:  I really went to the city and county, 'cause they had the political power.  And what I wanted to get was, could we share that rent times one?  So, like I said, if there's three entities getting Internet from CenturyLink, they get to charge rent on those lines.  Even though I've already paid rent on that line, then the city has to pay rent as well, and the county.  And I've already paid rent.  So, they're already getting paid for that line in the ground.  Well, they can charge each one of us the same rent.  So, how I approached it was, could we share that?  If we shared that Internet, and we all shared that one line coming in, then we split it up between us, then we only have to share -- pay that rent once.  And then we all split the cost.  And that's currently what started it.

And right around that same time, the Office of Information Technology from the state started talking about these collaborative ideas.  Started -- I just did it because of sheer cost.  I wanted to get my costs down.  I wanted to add value for the same amount of money.


Chris:  And is this basically just peering, and aggregating demand, and that sort of thing?  Or is there -- is that not adequate to explain what you're doing?


Tim:  It's exactly that.  But in a rural area.  It's exactly that.  So, it's no different than those big carrier hotels that they have, down around the country, strategically placed for these Internet connections, where these carriers all get to jump on each others' networks and interconnect.  It's just that, but it's in a rural area.


Chris:  OK.


Tim:  And so it's based on our need, not on the carrier's need.  It's based on the client's need, not the carrier's need.


Chris:  So, as I was doing a little bit of research on what you're doing, I found references to the Northwest Colorado Broadband Coop.


Tim:  Yeah.


Chris:  Does that tie into this at all?


Tim:  It does.  We had to form that company to get around Senate Bill 152, which basically states that local governments are not allowed to get into the telecom business, either via voice or data.  And so, to get around that, we formed Northwest Colorado Broadband.  And the only real legal entity of that is the Chamber of Commerce.  And so, they run Northwest Colorado Broadband.  We're all members.  We buy our services from that cooperative.  And that gets us around Senate Bill 152.  Because we're all local governments -- the school district, the city, and the county.


Chris:  I find it interesting that you've come back a couple of times to the need to work with the county and other entities.  When we recently had a podcast interview with Seth Mobley, up in Rio Blanco, he was saying that that was incredibly important.  And I'm always just curious.  Was there -- has there been tension, in terms of the school district working with the county, working with the Chamber.  I mean, a lot of times, particularly in smaller towns, we find tension between different levels of government and other entities.


Tim:  There was.  Basically, that's what took so long for us to get started.  'Cause we talked about it for -- I want to say three years, but it might have been just a little bit over two years, before we actually DID anything about it.  And that's what we had to get used to -- is, we had to focus on the greater good, not on the immediate need of any one entity.  So, how I look at it -- and it hasn't gone this way -- is -- what I would like us to see, is, each one of us, each year, commit a certain amount of money -- and, in my mind, it should be like $50,000 -- towards broadband.  And then, one entity gets all that money -- we prioritize that, and, how I envision that is, one entity gets all that money for year one, and another entity gets that money for year two.  But then, after a few years of that, you're going to have this great big spiderweb of a network that's all of ours.  At equal cost.  And then there's not these IRUs going back and forth, of, well, you only paid for a quarter of a mile of it, and I paid for three-quarters of a mile, and -- that's -- you know, you get away from all of that.  That's how I would like it to be seen.

And the new Chamber president said it's excellent, because he's worked with a lot of different governments in his previous Chamber jobs, in other areas of the nation, and he said, governments don't work as well as what you guys are working up here -- traditionally, together.


Chris:  And so, I think that leads me to the question of -- the Chamber's involved with this.  Is this something that's going to benefit businesses?  Or is the Chamber just really focused on making sure that the schools and the counties are operating efficiently?


Tim:  Nope.  Our goal is to help businesses, or anyone.  But the reason that it's small right now, with just us anchor institutions, is because of that Senate Bill 152.  And also, because if you're a business, you have to -- we have to prove ourselves -- or, I would, if I were a business owner, I wouldn't get into business with anyone if they're not proven to be sustainable.  And so, we did start with the local ISPs, as well.  But they're kind of no different than, really, any Internet provider -- middle-mile or last-mile.  It's -- they kind of want to control the market.  Their business model is different than my business model, as a local government.  That's partially why it took a while to get started.  Because we had them at the table as well.  But their needs were different than our needs.  And so, we just pushed them aside temporarily, so that we could build this room, check the demand amongst ourselves, prove ourselves reliable.  And now, we'll go back out to the community and ask businesses, do they want to benefit from this?  And it could be from those ISPs.  'Cause if I can lower those ISPs' middle-mile costs, they can add more network, or lower their costs to their clients -- which is our clients, the community itself.


Chris:  And when you talk about a spiderweb of network, ultimately, do you envision -- is the vision that you would ultimately have a connection to every home, every business, every basic building in the area?  Or is it more limited than that?


Tim:  We're envisioning, right now, at least going from owning the trunk line -- this Northwest Colorado Broadband creating a trunk line, here, over this next year -- that will go from one end of town to the other end of town.  And it would swing through the town a little bit, to connect these anchor institutions that need connection.  We all have day jobs.  And the only reason we're doing this is 'cause we were waiting for our incumbent to meet our needs, and they weren't doing it.  'Cause, according to them, we weren't big enough.  We're doing this not to connect the community but to provide a good opportunity for anyone who's in that business to connect the community, and just use our assets -- at a reasonable, fair cost.

So, in that same project, that I mentioned, that we're going to create this trunk line, we've also committed us entities -- Yampa Valley Electric, Colorado Mountain College, the hospital, the city, and the county -- we're all adding different laterals off of that trunk line to connect our own facilities.  But the whole thing -- the laterals and the trunk line -- at the end of the day will be able to be used by all of us, and/or our customers to come in the future.


Chris:  And so, I think one of the things that people think about when you talk about these sorts of upgrades and Internet capacity is, they want to think faster speeds, faster speeds.  But one of the things that, it seems, that you've had to deal with is reliability issues.


Tim:  Right.


Chris:  And I'm wondering if you can just tell us, how does this help with that.  I mean, have you had major reliability problems prior?


Tim:  Yes.  The first one was the cost.  So, that was directly related to speed.  And so I couldn't afford the bandwidth I needed.  So I was using it all.  So we got that lowered, so it's more affordable.  And that -- we solved that problem.

And the next was redundancy.  So, by bringing multiple carriers in -- and right now, I said, we have one -- EAGLE-Net and CenturyLink.  CenturyLink rides up from the east.  So, they come up from Dillon and Silverthorn and head north from there.  And that's the main road to get into Steamboat.  The alternate road to get to Steamboat is from the west.  And that goes down through Rifle, Colorado, and then up through Meeker, and comes around that way, from the west.  So, by bringing this carrier, this Mammoth Networks, in, they ride two different networks.  They ride CenturyLink -- for us -- we pay for that redundant connection -- and then they also ride EAGLE-Net to the west.  And we've had to use that redundant path three times since we lit it up.  And so we've had -- the main carrier has gone down three different times.  The last time, just a few weeks ago, for many, many, many, many hours.  It was close to a whole day -- a working day, like, eight hours -- that they went down.  And us, that were connected from my room, we all survived, 'cause we all went west; and we didn't even feel a blip.  But everybody else in the town went down hard.  The banks, the hospital, other businesses.  There was a huge cattle sale going on.  It was going to generate $300 million over the sale of all the cattle.  Well, luckily, they got back up a different way.  But it was -- they were scrambling.  The sale was in jeopardy.


Chris:  I saw that there was some estimates that the cost of outage in Steamboat -- based on a 2011 outage that you had -- could be anywhere from a million dollars an hour to a million dollars for eight hours, depending on the time of year and the tourist season.


Tim:  Yeah.


Chris:  That's pretty amazing.


Tim:  Yeah.  We have a lot of influential people who like to come here while they're on their vacations.  And then, while they're here, they just -- they continue to do business as well.  And the example I gave you, of the company that's doing -- that does international videoconferencing.  These big international companies typically have a rule on the books that their executives have to videoconference so many hours before they're allowed to physically get on a plane and travel, to keep costs under control.  And that's what this guy does.  He sets up those things for him.  And he wasn't able to do that out of Steamboat before.  Until just -- since we've built this room.  He couldn't find a reliable, redundant connection that he could afford, at a reasonable price, and was reliable.  he just couldn't do it.  So he was charging all his clients to drive down to Denver.  And there's lots of that kind of people here in town.  I just had a good conversation with a guy who does this exact business for Cisco, but on the European side, but on these big peer hotels that you were mentioning.  And he was really fascinated that I've really kind of solved this rural kind of problem in the rural areas, by doing smaller scales of those carrier hotels, basically.


Chris:  Right.  Well, it's something that I would love to see.  Because I think that's the goal of the Internet.  You know, the Internet shouldn't be something that we allow to basically have to pass through the -- the sort of the Comcast centralized network or the CenturyLink network, where, you know, it basically follows whatever path they choose to take it.


Tim:  Correct.


Chris:  Ideally, you should be able to ping around from, you know, your room, to a room in western Minnesota, to, you know, wherever.


Tim:  Yes.  We're between Interstate 70 and Interstate 80.  And there's only a few connections that actually join those two major Interstates.  And those two Interstates cover a large portion of the country.  And so, we're very attractive -- if we can prove ourselves sustainable -- to other large, nationwide carriers, to come down and make that connection to us.  Because we've already got the connection to I-70.  So they're already halfway there, to I-70.  So, now, they just need to find -- do the other half, and now they've got a redundant line between those two major Interstates.  That would be my goal.  It's not just a redundant connection to Denver -- Internet connection.  But to have a redundant Internet connection to Salt Lake City, which eventually goes to LA, and those kind of places.


Chris:  Well, thank you so much for coming on.  It's a technical topic.  But I think it's one of those things that people should understand.  That there are these "outside-the-box" solutions that can really make a big difference.


Tim:  We stood up that room for under $200,000.  We stood up that room -- that was building it, burying the fiber to that room, to give us the control of that fiber, so no one entity controlled it -- of these carriers.  So it was relatively inexpensive.  And then -- so our ROI on that investment was within a couple years amongst all of us.  So it was a no-brainer.


Chris:  Well, thank you for coming on the show.


Tim:  Thank you, Chris.


Lisa:  You can follow on Twitter.  Our handle is @communitynets .  You can also follow us on Facebook.  Search for "Community Broadband Networks."  Once again, we want to thank bkfm-b-side for their song, "Raise Your Hands," licensed through Creative Commons.  And thanks again for listening.