Fast, affordable Internet access for all.
Is Open Access the Future? - Community Broadband Bits Podcast Episode 424
For communities looking to improve Internet access for their citizens but that might be wary of becoming full-fledged Internet Service Providers (ISPs) themselves, open access networks offer a practical model for the future. Like roads, open access networks serve as publicly owned byways that telecommunications providers can then lease bandwidth on and offer a wide array of information services. They ensure competition, provide local control of underlying infrastructure, and lead to economic growth.
This week on the podcast Christopher speaks with Jeff Christensen, President of EntryPoint Networks, a consulting and software company working with communities around the country (including Ammon, Idaho) on open access networks. Jeff shares with Christopher what’s been happening recently, including some of the software upgrades EntryPoint has developed over the last year and the impact they’ll have both for administrators and users moving forward.
Christopher and Jeff then dig into the future of state telecommunications policy, and the vision that communities need to have to confront the realities of existing cable and telecom monopolies around the country. They talk about the potential of government policies that promote competition rather than restrain it, and the possibilities for network innovation if we were to reframe how we think about Internet access in terms of having separate infrastructure and service components. Finally, they spend some time discussing practical steps communities can take, including defining the problem and then making low-interest loans to build open access fiber networks in their regions.
If you’re interested in learning more about open access networks, we break down basic models, concepts, and advantages. Or, listen to Jeff’s TedX talks, The Internet Disruption Every City Needs and Modern Networks, Innovation, and Cities or read his recent Medium post, "We Need Our Internet Access Networks to Be Something They Are Not."
This show is 41 minutes long and can be played on this page or via Apple Podcasts or the tool of your choice using this feed.
We want your feedback and suggestions for the show-please e-mail us or leave a comment below.
Listen to other episodes here or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance here.
Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.
Jeff Christensen: You start to open up the hood of the engine and a lot of things become possible if the system's an open system.
Ry Marcattilio-McCracken: Welcome to episode 424 of the Community Broadband Bits Podcast. This is Ry Marcattilio-McCracken here at the Institute for Local Self-Reliance. Today Christopher talks with Jeff Christensen, president of EntryPoint Networks, a consulting and software company working with communities around the country, including Ammon, Idaho and their open access network. Jeff shares with Christopher some of the software upgrades EntryPoint has developed over the last year and the impact they'll have both for administrators and users moving forward. Christopher and Jeff then dig into the future of state telecommunications policy and the vision that communities need to have, to confront the realities of existing cable and telecom monopolies around the country.
Ry Marcattilio-McCracken: They talk about the potential of government policies that promote competition, rather than restrain it. And the possibilities for network innovation if we were to reframe how we think about Internet access, so infrastructure and service become separate components. Finally, they spend some time discussing practical steps communities can take, including defining the problem and then making low interest loans to build open access fiber networks in their region. Now here's Christopher talking with Jeff Christensen.
Christopher Mitchell: Welcome to another episode of the Community Broadband Bits Podcast. I'm Christopher Mitchell with the Institute for Local Self-Reliance recording today in Saint Paul, Minnesota. I'm talking with Jeff Christensen, the president and CEO of EntryPoint. Welcome back to the show, Jeff.
Jeff Christensen: Chris, great to be back. Thank you. It's always a pleasure.
Christopher Mitchell: Yes, I'm excited for people to hear what some of the exciting updates that you've shared with me that we'll start with in a minute. But we're going to talk a lot today about how states should think about solving this problem. I think you have a proposal that I really like and I'd love to see where it goes in terms of getting some states to embrace it. But let's start off by just reminding people, EntryPoint, what is EntryPoint?
Jeff Christensen: EntryPoint is most famous I'm sure because we're the technology behind the Ammon Network in Idaho.
Christopher Mitchell: You know that I have a specialized audience when you can say that. You're most famous because of running the technology in a town in eastern Idaho.
Jeff Christensen: That's right. That nobody's heard of except in broadband context.
Christopher Mitchell: But I've visited three times and it's wonderful.
Jeff Christensen: Yeah.
Christopher Mitchell: And you've probably spent half your life there at this point it seems like.
Jeff Christensen: I've had a COVID break from drives to Idaho.
Christopher Mitchell: Sure.
Jeff Christensen: But I was there last Thursday again, and I've been trying to calculate how many times I've driven that road and it's well over 200.
Christopher Mitchell: Yeah. Good thing it's somewhat scenic, right?
Jeff Christensen: Yeah. Yeah, it's not the Tetons, but it's good.
Christopher Mitchell: EntryPoint, I cut you off.
Jeff Christensen: Yeah, no, EntryPoint is the technology ... We're really a software as a service technology for open access networks, Ammon being the first and really showcase client at this point in time. Our focus is ... The way we look at what we're doing is we are taking technology that exists in the data center, networking technology, and applying it to a city context for an open access network. We're unique probably in the municipal broadband space because we are a pure software play. But we have figured out that you can't just build software, you have to actually build networks to make things happen. The last two to three years we've spent a lot more time and effort contributing to that space.
Christopher Mitchell: And if people want to search you, I think we'll try to put these in the show notes, but you have two Ted X talks that really go into a lot of the philosophy behind what you do.
Jeff Christensen: Yep, two Ted X talks that 2016, 2017. So, they're a little dated in age, but I don't think the concepts are dated yet. Probably 100 articles have been written about Ammon. One article that's relevant for our conversation today is an article I published in Medium earlier this year, really as COVID emerged, sort of projecting what we thought would happen with the money that would flow to broadband because of COVID. I think we were pretty accurate in terms of how that's unfolded, but we can get into that more in this conversation.
Christopher Mitchell: Yeah, let's do that. But let's start by just learning a little bit more about what's happening. For people who are really enthusiastic about Ammon, is there news out there that they should be excited about in terms of others that are moving forward with that model?
Jeff Christensen: Yeah. There's a couple of different threads that are happening. There's what's going on in Ammon itself. Ammon has been a slow process one, because they built the network. Two, because they have iterated alongside us and the technology challenges that we're attacking are difficult. So, we've been a mitigating factor ... We've affected the pace at which they could go. But Ammon, this year they're about to connect another 500 customers over the next two months. Another thread is what's going on with the technology. I would say last year, 2019, there was a focus on scale. Can this technology scale to a city of 50,000, 100,000, 250,000?
Christopher Mitchell: Before you say that, let me just jump in to note the technology in particular, I think people would most think of it at it's simplest form as allowing people to choose between multiple service providers. You do a lot more than that, but in particular this is a portal that a person uses on their computer to choose which services they want. That's sort of what people see, but there's a lot of other stuff underneath the hood. But for people who aren't familiar with Ammon, that's the software we're talking about.
Jeff Christensen: Yeah. Thanks for not letting me just run past assumptions here. Yes, you're correct. Today it is a portal where people can dynamically in real time choose an ISP.
Christopher Mitchell: Or multiple ISPs. I just, I love that. That's part of the vision is that it's not just one.
Jeff Christensen: Yeah, the way I talk about it the most is we're giving people a virtual wire and our goal is to let them choose what they do across that virtual wire. But they can also have many virtual wires coming across one physical wire. This year we've been focused on the operating system that goes at the customer edge. We made some really important headway on the scale issue last year, the thing that has really limited the full suite of automation has been this operating system. We were previously outsourcing that to a company out of Hong Kong. This year we bought that operating system and we needed to make some fundamental changes to it, to enable the full passive automation.
Jeff Christensen: September first we will start to deploy that operating system in Ammon. It's not earth shattering for anybody but people that have a real close view of what's going on. But for, I would say this is the most significant leap forward for EntryPoint in what will become possible now with this change. So, this is a big ... We've really been working on these problems from the beginning, which is now 10 years-plus. So, this is a big inflection point for the technology.
Christopher Mitchell: Stay tuned for new changes in the software.
Jeff Christensen: Yeah. So, the next 12 months there will be a lot that will happen in the next 12 months.
Christopher Mitchell: And then on top of that, I don't know how much you are interested in sharing, but we know that there's several other towns that have been interested, studying this and look like they're going to be moving forward.
Jeff Christensen: Yeah. So, in Idaho itself I think it's official that Mountain Home and McCall are two cities that are the same size roughly as Ammon. McCall's interesting because they're 4,000 to 5,000 people throughout the year and in the summer months they're 30,000 people. So, that creates real interesting challenges for their communication systems. Both of those are official. I think there's 20 that could move over the next 12 months and we try not to get ahead of clients making their own announcements. But we don't know exactly. I know some of them that will make their own announcements over the coming months. But really I was looking at the list and there's 20 that could move.
Christopher Mitchell: Right. That's just exciting.
Jeff Christensen: That are far enough along. Yeah. And people look at it and think how can you have 20 projects going simultaneously? And we're a software company. Software scales if other things are happening that need to happen.
Christopher Mitchell: Well, I also think you've exhausted your family traveling around the country talking with folks about this. And I think that's a big piece of it. I know that you've made a big effort to be in media to just any opportunity you had to get the word out. I think that's a big piece of it too.
Jeff Christensen: Yeah. There's a lot of seeds have been put in the ground. And we don't know the exact timing on that, but there are a lot of cities that are looking at Ammon. And range in size from the smallest I think is probably 12,000 and the biggest is 250,000 at this point.
Christopher Mitchell: That's just, it's thrilling.
Jeff Christensen: Yeah.
Christopher Mitchell: But I did have you on because I wanted to talk about something, we were going back and forth about state policy. You offered several bullet points that I think are well worth discussing about how states should be thinking about this. Before we get into those bullet points, when we were talking about this you said very emphatically, "People need to have a vision." And I'm curious what that means.
Jeff Christensen: Part of it is really understanding what the problem is. I think a lot of people understand that we are either at a cable monopoly or we're headed there. So, part of a vision is just to articulate what's wrong with these systems or this system. Monopoly, for me it distills down to these companies have absolute control and that's the fundamental starting point of the problem.
Christopher Mitchell: I think you're right. I actually think that's how a lot of Americans think of this issue. But I think a lot of people at the state level think of it as just there's not enough people that have access to a monopoly and that it's just a matter of getting service out there. It is interesting that I feel like the way you defined it resonates. I mean, I can't tell you how many times I'm talking with some group of people, mixed, sometimes some consultants or other people that are kind of on our side of thinking about this problem from a policy point of view. And someone, an activist from a community says, "Oh, we're really struggling, this is where we are." And another person says, "Well, half your town already has Comcast, what's the problem?" And not understanding that the demand for better service in that town, it may actually even be stronger in the area that has Comcast than the side that doesn't.
Christopher Mitchell: That's one of the things that we've seen in some places, is that towns that are trying to build out in the areas that don't have broadband, in a rural area, they have people in the area that has a big cable provider and they're saying, "No, no, come to us. We really need it too." People just don't understand that even if you have monopoly service, and even if I would say, I think that's fairly decent technical broadband service that Comcast is delivering and the price is not too outrageous. Many people, that is a problem still, that's not the solution.
Jeff Christensen: The crazy thing is, is if we really could see a map of a city and see what people are actually getting, it's really sporadic. And there are pockets in every city in this country that have crazy bad coverage. The reality on the ground is this is a problem in every US city, including the big urban centers. It's a problem everywhere. And it's really a fundamental problem with the model. SO, to go back to vision, I think we've got to be more articulate on what the problem is. And that includes ... I think at the federal level and at the state level there's a real lack of articulate understanding of this problem and what's going on out there where communities are fixing it. You've done as much as anybody to fix that.
Christopher Mitchell: I've deliberately tried to have a very big tent and not to sort of pick the models. But I think, I'm so excited by the work Jon Sallet and the Benton Institute are doing to really bring this issue of competition to the floor. Because I do feel like in D.C. and many state capitols there's this sense that competition, if you're of a pro-competition government policy, that means you try to stay out of the way. Rather than you're investigating what it takes in terms of positive government policies. Which I don't mean in terms of necessarily saying that they're obviously good, but just in the sense of government doing something in addition to create competition. And that's a mindset thing that I feel like most people haven't grasped yet, is that we will not have competition if government just removes barriers. We actually need to have positive investment from neutral entities to create the capacity for competition at a scale that would really be competition.
Jeff Christensen: Yep. I think that's really true and I think we'll probably get into that a little more in our conversation here as it relates to opening up funding and financing for networks. The other piece of it that I think we're all blind to, is the innovation side of it. Which means these companies have total control, so effectively they block innovation. So, they're blocking anybody from innovating around them. This idea, and this is really Robert Peterson's idea, the separating infrastructure and service. Bruce Patterson has instantiated the idea in the Ammon Network.
Christopher Mitchell: Robert Peterson is a many of many hats. One of the things he's done, is he's worked as a consultant with rural telcos, but also has been a major influence in ... I'm trying to think of the right ... visionary of the Ammon Network, of EntryPoint and that sort of a thing. His name doesn't always come up, he's kind of a behind the scenes ideas guy.
Jeff Christensen: Yeah. Yeah, so Robert is the founder of EntryPoint. When Bruce Patterson and Ammon started that network he went to Robert. Robert's really been the consultant for Ammon throughout the whole process and is today. So, that continues. That is Robert's fundamental idea, separating infrastructure and service. That is fundamental to the vision. Until we get that separation where the public controls the infrastructure in some form and it's separated from the services, I don't think we can solve this problem. I think that separation has to occur. And there may be instances where people behave in a benevolent way. So, theoretically it could happen. Practically, we feel strongly you've got to separate infrastructure. There needs to be a separation of power for this problem to get solved.
Christopher Mitchell: And the problem in this case you're talking about is innovation. That's how you got into this.
Jeff Christensen: Yeah.
Christopher Mitchell: I feel like a lot of people have this mindset that what's left to innovate? We had voice, now we have video, we have data, video and voice. What else is there?
Jeff Christensen: Right. And it really is. I mean, inertia is part of the vision problem because we know these systems work and what we can do with these networks is quite remarkable. But we really have settled in now for 20 years, 25 years on the status quo on how these networks are being operated. So, there is no discussion out there of what innovation is not happening because we're stuck inside of this paradigm. Part of what we're excited about next year with this operating system, is we will start to peel that onion. One question is, and we don't have an answer to this, but one question is what is it that ISPs do that can or cannot be automated? And it's not just the ISP, but any service delivered across this network, what can we do through automation to improve network reliability? What can we do to avoid truck rolls, security? I mean, everything that's important to a network, we're interested in applying automation to that problem and seeing how far that will take us.
Christopher Mitchell: That's one of those areas where I feel like for those of us who got ... We're used to the network having these oddities. There was awhile where email became unusable. And then we got better spam blocker lists and all these things. I feel like we're kind of invisible to how much things don't work right now because of security. That's one of those areas where I feel like we could see a lot of innovation and take our blinders off and realize we don't have to live with our data being constantly exposed to everyone.
Jeff Christensen: Right. Yeah, exactly. Yeah. Another interesting thing, Robert Peterson called me on Monday morning this week. He had spent the weekend looking at upload and download speeds, I think he had sampled data like 80 times over a period of time. And comparing the rate of growth of upload speed and download speed from October of last year through today. The expectation is that the demand would increase for both upload and download speed because of COVID. His finding was that the download speed did increase at a predictable rate, but the upload speeds were increasing at a pace that if it continued, and I don't think it would because I think COVID's putting the demand. But if it did continue, we would be up to demand of terabit upload speeds in a matter of years. He's just showing that the rate of growth for upload speed is increasing much faster than he expected.
Jeff Christensen: But if you're running a cable company and you artificially block or cap what people can do with upload, you're never going to see that trend. You're not going to pick that up in the data because you're artificially constraining it. So, he's looking at a network that doesn't constrain it and seeing what's happening. It's just, you start to open up the hood of the engine and a lot of things become possible if the system's an open system.
Christopher Mitchell: And that's why we need to make sure the states are thinking about this and have the right vision. And the vision is unleashing innovation, is encouraging competition. Now, the first principle that you put forward I think we can probably agree to and move past pretty quickly, and that is that ... because anyone who's listening to this show is certainly aware that one of our big issue is that cities should have the authority to build their own networks. Similarly, states technically don't even have the authority to limit cooperatives. But they still do. And the cooperatives would have to go to district court, federal court in order to have that overturned and they're often reluctant to. Flat out, states should just make it clear that there's subdivisions and that cooperatives have authority to own and operate fiber networks to the home.
Jeff Christensen: Yep. I'm would include counties in that. Counties today, we're working with a county in Arizona that is ready to go in terms of political leadership, but they're constrained by a financing vehicle through state law. You said subdivision, so that would include counties. But yeah. We need to clear that hurdle nationwide.
Christopher Mitchell: The second point then, because we could talk more about that but people already know our position on it.
Jeff Christensen: Yeah, right.
Christopher Mitchell: The second piece is where I feel like we're finally at a place where I can imagine this happening. Several years ago we were thinking it would be nice, but now I can really see this happening. States should provide low interest 20 year loans for cities and infrastructure cooperatives, and I would also just add tribes as well, to build fiber optic networks. Why low interest long-term loans as a mechanism, rather than grants?
Jeff Christensen: Grants are great. I think the thinking today is that if, in a lot of places, a grant is needed in order to build this kind of network. We really want to try and focus in on the fact that the average cost for American consumers today is $68 a month. That's for a really average network, at least speed and capability. That money is the money that we should focus our financing on because that's money people are spending consistently, a big majority of US households have a wired connection. They're spending that $68. So, we want to see financing focused on not coming up with new income through revenue streams because this is a new thing. But really altering the financing path that exists today.
Jeff Christensen: We want to focus on what's being spent today and just get more value and probably in most cases shrink what they're paying. The idea of a low interest loan is that if the state would get behind it, it would really open up the spigot in terms of financing these projects. And part of our thinking, is we would solve this problem really rapidly if we could get to a real estate developer mentality. So, if fiber is real estate and we opened up the possibility that fiber can be developed like other real estate. And the two conditions that you and I have discussed are one, that the network is fiber. So, we're going to finance fiber optic networks. And two, that it's going to be open access.
Jeff Christensen: That may sound self-serving to hear from a guy that has a software that's an open access software. But the point is that open access, to us the definition of open access is open to competition and open to innovation. We would be fine if an incumbent operator tapped a state program for a low interest loan, as long as they're building fiber and as long as they're going to make that network open access.
Christopher Mitchell: Right. I feel like you can think about the self interest of you as a software provider. But fundamentally I feel like this is something we've talked about many times in terms of the roads. I have felt, and my personal philosophy is that if you're going to use that much taxpayer dollars to get a benefit for the public, it should be open to all. It shouldn't be sort of a windfall. Now, I don't think that should be written into law necessarily. I do feel like, I mean I work at a place called the Institute for Local Self-Reliance. So, fully respect that people may have ideas in their towns that are different from mine.
Christopher Mitchell: But I do feel like we're putting all this money. I mean, think of the billions of dollars that have been spent by the federal government on infrastructure. Or even not on infrastructure, just subsidies to companies that already had infrastructure that they could build that's private and it's of no use to solving our problem today.
Jeff Christensen: Yeah.
Christopher Mitchell: Last week the podcast that came out talked about Mississippi and the co-ops down there. The federal government has put hundreds of millions of dollars into broadband in Mississippi ... into not broadband, into subsidies to AT&T in Mississippi. The co-ops are now building it at a fraction of the subsidy to build fiber to the home. And you have a sense of all that wasted money. And I mean, it's odd that I would use that as an example because the co-ops themselves are not supportive of open access requirements often. But this is where I think there is a sense that it is entirely reasonable to put those sorts of requirements on for the benefit of everyone.
Jeff Christensen: Yeah. And if we could, the way I want the government to think about it, whether it's federal or state, is how do we solve the broadband problem? To me, fiber is a core part of the solution because its capacity takes us 50 years out. So, how do we solve the problem? Well, let's open up the incentives and the ability to attract the capital or get capital. But let's put it ... if we're going to have this money spent, let's not give public money to private companies to drive up the stock price of those private companies. I'm a private company, I'm all for private companies doing well. But all of this public money is being spent and I think the outcomes are really poor in terms of public value that's come.
Christopher Mitchell: Um hum. Now, I should say that we've combined points two and three.
Jeff Christensen: Okay.
Christopher Mitchell: Point two is the loans and part three is ... You're right to combine them ... that the infrastructure is fiber optic and open access. So, for people who are counting at home. The other piece of it is, I think, I take seriously concerns that I think are often offered disingenuously by people that are working for the cable and telephone companies, that it is unfair for the government to create competition for them. That they made their investments, they took their risks, why should government interfere? I think government should pause and be very serious about thinking when it gets involved in a market in any sort of thing. I mean, frankly we should also have well-considered government policy. But in particular in this area where there would be a fear that government could use the power to tax, to unfairly compete.
Christopher Mitchell: That's where I feel like the open access requirement as well, really is helpful. Because this idea of you're building a neutral platform that any entity can use to compete fairly then. You're creating that level playing field.
Jeff Christensen: Yeah. And it does ... That pushes us right back to the conversation, fiber takes us into a new era of possibilities. Because we don't need ... In most communities in the US we don't need multiple fiber networks. We need one open fiber network and it's open to any service provider. And they're free to compete across that. We really are leveling the playing field. But the economics are not there. I would say we believe two things are inevitable. One is fiber is inevitable because of its capacity. The second thing that's inevitable is it's going to become shared infrastructure because the economics won't support doing multiple instances of something where the inherent qualities of that media make it possible we just need one. We need one good fiber network.
Christopher Mitchell: Yes. The incentives and the history suggests that when there are two networks, they will either say, "You take that market and I'll take this market." Or they'll find some other way. They'll just say, "All right, we're not going to talk to each other. But I see they just raised prices, so now we're going to raise prices." And you just, you don't get the benefits. So, even if you have two and I think three providers can change it, but historically even three private sector companies will also try to figure out ways of maximizing their benefit. Because they don't have the right incentives to maximize innovation or spill over benefits or indirect benefits, whatever you want to think of it, all the other things that come along with these networks.
Jeff Christensen: Yeah. Yeah, we're working with this county in Arizona and $19 million just went to the cable company for E-Rate, they got another million from a private foundation to build to a community of about 25,000, and then they got another million from the state of Arizona. I know they're going to take that E-Rate money and their plan is to build 144 count fiber, even though there are not 144 schools and libraries in that county. So, it's not like they're giving a fiber to every school and library. If the county had the ability to just add to that fiber count at their expense. So, "We're just going to attach, we're going to add 96 strands to what you're already doing and we will cover the cost of that," the public good that would come out of that would be immense. But that money has been handed over to this private company and they will now leverage that for their benefit.
Jeff Christensen: One exercise that I think would be really good for people to do at this point in time, is to go look at the five year stock price of the cable companies. Look at Charter Spectrum, look at ... Comcast is a little more complicated because they're buying content, NBC, et cetera. Look at Cable One's five year stock price. And then compare it to the pure telephone companies, CenturyLink and Frontier. There's a really interesting story playing out there, in terms of where are we headed and how close are we to monopoly? Now, that's data, you don't have to parse through the accounting information in there in the report. Just go look at their stock price and the story is playing out there.
Christopher Mitchell: And we also see reports that two out of three subscribers of broadband are cable customers that, some of them are forecasting as high as 70% I think now after COVID-19 has driven the demand for higher capacity connections in the home. Cable companies are winning. And the telephone companies are trying to refocus their investments in those urban areas. But it's far from clear that that will be enough. And even if it is, it's not to provide service to everyone. And that actually gets us to your last point, which is that you called for loans. That actually reminds me, when you say provide the low interest 20 year loans, I think people assume you're talking about rural areas. But you're talking about pretty much anywhere that was willing to build this sort of infrastructure. Right?
Jeff Christensen: Yeah. Yeah. I'm talking about anywhere. And I think you would really find a real estate developer mentality, where there's an area of the country ... It would be surprising to people to see the fiber percentages in a lot of states in the US. I mean, the country as a whole is below 35%. But there are some states that are below 5% fiber. If that capital was there, I think you would see very rapid, and I think in a 10 year period you would see the country built out on fiber. And if it were open access, open to competition and innovation, then you would see a real transformation and a real flourishing I think, of what's happening across the networks.
Christopher Mitchell: I think one of the things to keep in mind is what we saw with electricity. And that's that you look at Lafayette, Louisiana. They have a generation plant for electricity that serves the communities around them. I don't think we would see thousands of cities doing this necessarily. I think we'd see many hundreds, in like Chattanooga and many other municipal networks, they would serve the communities around them. So, we wouldn't necessarily have one network for every incorporated entity. We would have regions that had a network, like Fairlawn in Ohio, which is now expanding a little bit. And we would see advantages that way I think, of low risk expansion. Because a network that has already proven it can handle its finances and everything else, expanding those networks is a no brainer in many ways.
Jeff Christensen: Yeah. You get operational efficiencies and they really do become like a utility operator. I mean, they're operating infrastructure and then services are flowing across the top of it.
Christopher Mitchell: Ideally we'd prefer that everyone has a chance to vote on who's maintaining that infrastructure. But at the same time, the evidence that I've seen suggests that Chattanooga serving several of its neighbors, they all get the same high level of service. They have that mentality. So, I feel like it's a good solution.
Jeff Christensen: Yeah. Yeah.
Christopher Mitchell: The last point then, is rural areas and the economically disadvantaged areas of cities in more urban areas, low income folks, which actually could also be in the rural areas. But they will need more than just a loan. They will need some kind of subsidization then.
Jeff Christensen: Yeah. And that's where I feel like a lot of federal and state money is ... I'm not going to say wasted, but the return on the investment is very poor right now. The current state, because of the way this whole system works, we're getting very poor return for our investment, very little leverage on the dollars. I think the focus in terms of grants, subsidies, it should be targeting the digital divide in whatever form. So, where a community is at a disadvantage to build this infrastructure, whether it's rural or urban, economically difficult, I think grants and ... I think there's a big opportunity, and you and I have been talking about this, there's a big opportunity for philanthropy.
Jeff Christensen: I'm working on a really interesting project in the Midwest. It's not funded yet. But if it is, it will be a really interesting project. And bringing the level of connectivity to a whole community in a big urban city up to a really ... Up to Ammon standards. That is where the need is, wherever the digital divide exists. Whether it's ... Usually there's an income component to that, sometimes it's just really poor connectivity. But there is a role for grants and subsidies.
Christopher Mitchell: As we pull this all together then, the grants and subsidies are something that will effectively take a chunk out of the state or federal government, they'll have to spend that money. But your overall program, the focus on the loans, uses historically low interest rates right now, states are able to borrow at rates that are so low that even the most meager benefits from having innovation and fiber and lower prices will make that a wonderful investment for the states to be repaying over the years. And this is why we have these sorts of investments, is to grow the economy more quickly. And we would expect the states that did this would see their economies grow more quickly as a result of the innovation, the new competition and things like that.
Jeff Christensen: Yeah. And even Asfi, in the interview, when As[fi] interviewed you, you got into this. But if the public sector, whether state, county or city, would get behind these networks, they don't have to bond a bunch of new debt for the city, they just have to get behind the effort to make Wall Street comfortable. And institutional money will come into this. And I think in really pretty rapid order we could fix the broadband problem. But some of these pieces we've been talking about have to align for it to happen.
Christopher Mitchell: Yes. And when you say fix the broadband problem, you mean in a meaningful way.
Jeff Christensen: Yeah.
Christopher Mitchell: I just want to come back to that because I just feel people forget it over and over again. Because when I look at places where they're, "Fixing the broadband problem," which I hope the way I said that is clear it's in quotation marks, but helping a telephone company create a monopoly of higher technology, that's delaying the broadband problem in many cases. Right?
Jeff Christensen: It is, yep. Absolutely.
Christopher Mitchell: It's saying, "In five years we're going to fight over pricing," and this and that.
Jeff Christensen: Yeah. Yeah, to us, fixing it is this shift to fiber optics, it's a shift to abundant bandwidth, stop treating bandwidth as a scare commodity, and a shift to open networks. To us, that's fixing the problem. Because you're treating fiber like an abundant resource, and it is, for bandwidth. And you're unleashing competition and innovation. To us, that's fixing the problem.
Christopher Mitchell: That sounds like a pretty good fix.
Jeff Christensen: Yeah.
Christopher Mitchell: Thank you, Jeff. Wonderful conversation. I really appreciate it.
Jeff Christensen: Yeah. I appreciate you and everything you're doing and it's always great to connect.
Christopher Mitchell: Sounds good. Enjoy that next drive up to Ammon.
Jeff Christensen: Okay, will do. Thanks, Chris.
Ry Marcattilio-McCracken: That was Christopher talking with Jeff Christensen. We have transcripts for this and other podcasts available at MuniNetworks.Org/BroadbandBits. Email us at Podcast@MuniNetworks.Org with your ideas for the show. Follow Chris on Twitter, his handle is @CommunityNets. Follow MuniNetworks.Org's stories on Twitter, the handle is @MuniNetworks. Subscribe to this and other podcasts from ILSR, including Building Local Power, Local Energy Rules, and the Composting for Community Podcast. You can access them anywhere you get your podcasts.
Ry Marcattilio-McCracken: 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, keeps us going. Thank you to Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons. This was episode 424 of the Community Broadband Bits Podcast. Thanks for listening.