Over 100 Years of Muni Telecom in Churchill County - Community Broadband Bits Podcast 204

Mark Feest: We are a local operation that has been the first in Nevada to build fiber-to-the-home. We've shown we can do it.

Lisa Gonzalez: Welcome to Episode 204 of the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. This is Lisa Gonzalez. In this age of companies changing hands and consolidation, it's rare to find a telecommunications provider like Churchill Communications. As you will hear in this interview with Mark Feest, this county-owned and operated entity has been serving people in and around Fallon, Nevada, since the late 1800s. It all began with the self-reliant attitude, some local leaders' desire to keep their community connected, and the purchase of a Western Union telegraph wire. Mark is the General Manager of Churchill Communications and shares the story of the county-owned network. Subscribers have access to high-quality connectivity in a very rural area thanks to this publicly owned network. At the Institute for Local Self-Reliance, we strive to bring you interesting stories like the one in Churchill, Nevada. We also bring you these stories with no commercials, but our work does require funding. Please take a few moments to go to ilsr.org or muninetworks.org and donate today to help us continue our mission. If you've donated before, thanks for your continuing support. If you're a new donor, welcome aboard, and thank you. Now here are Chris and Mark Feest from Churchill Communications. By the way, listen closely for some news from Mark.

Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell, and today I'm speaking with Mark Feest, the General Manager for Churchill Communications in Nevada. Welcome to the show.

Mark Feest: Thank you.

Chris Mitchell: Tell us a little bit about Churchill Communications, or actually the county in particular, Churchill County. What's the county like?

Mark Feest: Well, Churchill County is in rural northern Nevada. We sit about 60 miles east of Reno off of the Interstate 80, and then down a little south on the State Route 50. About 5,000 square miles in Churchill County. Only really 1 city, which is Fallon, which is the county seat. About 10,000 people live inside Fallon, about another 15,000 live in the outlying areas surrounding the City of Fallon in the unincorporated Churchill County. We have 4 or 5 what we call "townships," but they really don't have any municipal authority. It's just kind of a traditional area that has names assigned to them, but really, if you live outside Fallon, you just live in unincorporated Churchill County. We're agriculture-based economy, originally. The Carson River and the Truckee River come together here. There's a project, a reclamation project, which created a reservoir and canals for farming alfalfa out here, and we also have the Naval Air Station Fallon, which is the home to the TOPGUN training center.

Chris Mitchell: Tell me about Churchill Communications. You are a county-owned network. What kind of services are you providing nowadays?

Mark Feest: Well, today, we offer IPTV, telephone of course, broadband, primarily over fiber-to-the-home. We're at about 92% homes passed. Those customers, they're still on telephone. Some of those still have, are served by copper plant, even if they're passed by fiber. We wait till they upgrade to a broadband service or television service to cut them over to fiber if they haven't already been cut. All construction has been done in the last 3 years on fiber-to-the-home. Everybody's cut over to fiber, whether or not they take just telephone or those enhanced services. Recently introduced gigabit service kind of in the, started with the city center, but any customer that's on fiber can get at least 100 megs. That really is a function of the ring back to our central office, if it's robust enough to get everybody 250, 500, or a gig.

Chris Mitchell: I have to think that that's probably a little rare in Nevada. I'm suspecting that a lot of people don't have that kind of service in the counties that touch yours.

Mark Feest: I'm not aware of anybody that has that kind of service in the counties that touch us. Las Vegas, which is served by a large regional company, they have some gig service downtown in the high-density population, but I certainly know that Reno doesn't have it, and the rural counties that surround us do not have that type of service yet.

Chris Mitchell: Well, let's get into a little bit of the history, because I think you may have a claim as the longest-running publicly owned telecommunications network. How did you guys get started?

Mark Feest: Well, I think we are the oldest company owned by a municipality. 1889, Western Union had a telegraph wire between Virginia City and out on a portion of I-80 that's east of Fallon probably another 45 miles. When the silver mines closed down, Western Union wanted to divest themselves of that. With no private companies coming forward, our Churchill County commissioners decided that they didn't want this town to be without telegraph service, so they made that purchase for $900 in 1889. 1890, is upgraded to a telephone. 1990, is upgraded to DSL. 2001, rolled out IPTV, and in 2007, we really started hitting fiber-to-the-home over built.

Chris Mitchell: Now you have some, I think, unique history in terms of how you've had to finance this, because I don't think you're allowed to use any taxpayer dollars. Do I have that right?

Mark Feest: That is correct. Our statute prohibits money from flowing from the county to the phone company, but because we were the incumbent, under the Telecommunications Act, we do now, and we have received universal service funds as a high-cost area to provide service, so between that and user funds, early on loans that were directly based upon the revenue generated of the phone company, that is really how we have financed it through the years.

Chris Mitchell: Well, I think it's one thing to have a high-quality network in town. How do you access the rest of the Internet?

Mark Feest: We have a fiber backhaul that we've had to put in ourselves from Churchill County into Reno due to the lack of availability or reliability, and extremely high prices that were charged from national carriers that had fiber between Churchill County into Reno, and so we have our own pipe that we put in in the railroad right away that goes into Reno, and then from then on to the Internet gateway.

Chris Mitchell: In upgrading to the gigabit, were you able to borrow, or were you just doing all of that out of your available cash?

Mark Feest: That was out of our available cash. We haven't borrowed money in over 20 years.

Chris Mitchell: Do people demand it? I mean, what was the decision made to try and go from DSL up to gigabit, and even the decision to do the IPTV?

Mark Feest: The IPTV, the private cable company, they do not serve beyond anybody that lives on a 1-acre lot, and they don't even serve everybody on a 1-acre lot, so they're basically just right there in Fallon, the city, and then a few people who live on the fringes of the city in the unincorporated county. Once the lots start getting bigger, they're not going to build out, and they've had many years since the '80s, obviously, a franchise, and they haven't built out, so in order to get broadband out to people, we had to go to the fiber-to-the-home, and there was a demand for television service, a subscription television service, outside the cable company's footprint, so that really drove that, with copper in the mid-2000s, when they were having difficulty getting above 4 megs. We saw a demand above 4 megs to provide television service, IPTV. You have to be above 4 megs, or you're not going to get anything like DVR or multiple set-top boxes, so that really, customer demand drove that. When we talk about gig, there's not a lot of customer demand right now for gig services. At anchor institutions such as our library, where there's multiple users and multiple devices being connected to it in excess of 25 or 30, we've delivered that gig service to them and a few other anchor institutions. However, we are seeing that demand for the 100-meg packages, and you certainly will need to go to fiber for 100-meg packages, especially where your loop lengths are longer, in a rural area.

Chris Mitchell: I'm curious about the longer backhaul routes that you have going into Reno and Carson City. Do you have people that are calling you up and saying, "Hey, Mark. We're not too far from the railroad right away, and we'd love to have you serve us, even though we're not in your county"?

Mark Feest: We absolutely do. It happens to go through kind of an industrial area, including the Tahoe Reno Industrial Center, which is billed as the largest industrial park in the United States. They had the Tesla plant go in, and so that's under construction now, as well as many other things, and those folks in there weren't getting the response, I think, from the commercial providers, and they've asked us to go in there, as well as other smaller industrial lots along that route.

Chris Mitchell: One of the things that I wanted to cover, we waited a little bit to have this conversation, you have an announcement that by the, at the time of this recording, it's right before the announcement, but by the time we release this interview, you will have already announced it. What is that announcement?

Mark Feest: Well, there's actually 2. One of them we hadn't spoken about. The first one is, we've entered in agreement with the SUPERNAP, which is owned by Switch, a very large data center that's out of Las Vegas, and now it's going into that Tahoe Reno Industrial Center. They've also announced in Grand Rapids, Michigan, and Milan, Italy, and we are working with them, we have merged portions of our fiber network with theirs, so that goes into that Tahoe Reno Industrial Park to make sure that those other businesses in there get the service they've been asking for. It also gives us an opportunity to be located in the SUPERNAP, which will provide greater access to the Internet gateway, more redundancy, and more reliable service for our customers.

Chris Mitchell: Let me just ask you what that means. Is that because people that are trying to download something from a network, that you're now more likely to be directly connected to them?

Mark Feest: Yes, absolutely. One service that we will now be able to have, which customers should never see, but they'll see it, because it's much more reliable, and that is multiple different routes to the Internet gateway, and what's called a redundant failover architecture, where if 1 route goes down, it automatically fails over to the next route 8 times, so you would literally need 8 national carriers not being connected to the Internet gateway before our backhaul would go down.

Chris Mitchell: That's something I think a lot of people listening would like to have for their connection.

Mark Feest: Yeah, it's, the usual architecture is, you have 2, maybe 3, which is what we have today, so it'll just add more redundancy to our network.

Chris Mitchell: What's the second announcement?

Mark Feest: The second announcement is, there is a 1.2-billion-dollar smart city development in downtown Reno in a kind of a blighted area, and the developers have gone forward to the Reno City Council to get some approval for a street closure to create a walking way and a park and a couple other things, but they own that property within a 17-acre area in downtown Reno, and they're redeveloping that to build a smart city, all the water will be reclaimed within that area. They will have a central power plant, and 1 thing they wanted was gigabit services to every resident. Because this is multi-dweller unit property, both condominiums and apartments, be between 1,700 and 2,000 units within that development. It'll also have the highest building in Reno, and they have selected us to be the gigabit provider within that community.

Chris Mitchell: I suspect that, at one time, a lot of people were either confused about or, and opposed to municipal networks. Now you find yourself being invited into industrial parks, into this development. What's changed over the years, as a municipal provider?

Mark Feest: Well, I think one thing that a lot of people realize is that in northern Nevada, and when people think of Nevada, they think of Las Vegas with 2 million people. Well, in northern Nevada and all of Washoe County, where Reno and Sparks sits, there's 400, 450,000 people, and while it's growing, that still isn't a population that really attracts high-quality service from these national companies. They're looking to invest in infrastructure in high-density areas, in cities that have 2 million, 2 million plus. You have to consider that in Las Vegas, with 2 million people, the carrier sold, and it became CenturyLink, so a large carrier sold to another carrier at 2 million. Treatment we get in the rurals, we feel, is pretty neglectful from national companies or large regional companies, but even someplace like Reno, with 400, 450,000 people in their metropolitan area, does not get the attention that customers want, and so we have an advantage here that we are a local operation that has been the first in Nevada to build fiber-to-the-home. We've shown we can do it. We've done it in an economical way where we're still able to generate positive revenue, and they see that, and they want to be associated with that because they know the job will get done.

Chris Mitchell: Have you personally met people that have changed their tune over the years?

Mark Feest: We had a state legislator in the past that was, really had an issue with government's roles and trying to limit government, and as she has seen us roll out fiber-to-the-home and gigabit service to our library, and she compares that to the rural area she lives, she's actually called and asked us to look and see if there's something we can do in her community also. As part of our deal with Switch and expanding our fiber network, we now have backhaul that goes right through the main city in the county she lives, and it's something we're considering going forward. We're trying to work on interlocal agreements with other local governments because they have a difficult time starting something up, both logistically and from a financial perspective, and we think that we can partner with them because we have the expertise and the history of doing this. There's opportunities to bring other rural communities service that, as of now, those private companies are neglecting.

Chris Mitchell: Right. That's something we're seeing more and more. We just wrote, as we're doing this interview, on our website, we actually just wrote about a municipal electric utility that has partnered with a telephone co-op, and the municipal electric's going to basically run some fiber, but they didn't want to get involved in the service, so they found an experienced telephone co-op to provide the services, and that's the sort of arrangement we like to see, is where we can have communities that are near yours capitalize on the investments and the expertise that you already have, by working with you, so it's an arrangement I really hope to see more of.

Mark Feest: Yes, I think one of the problems is always backhaul. As we get more and more video streaming over the Internet, we need a robust fiber network out of the small towns. Building it in the small town, we know how to do that, but sometimes the distances for the backhaul fiber is prohibitive, and that's why we're really excited about our agreement that we were able to enter with Switch that now provides us access to some of these other communities that have been asking for service in the past.

Chris Mitchell: All right. Well, thank you so much for coming on to tell us more about what we think is probably the oldest-running municipal network in the nation.

Mark Feest: Thank you.

Lisa Gonzalez: That was Chris talking with Mark Feest, General Manager of Churchill Communications in Nevada. Learn more about the network at cccomm.info. You can access the transcript for this and other Community Broadband Bits podcasts at muninetworks.org/broadbandbits. Send us your ideas for the show, email us at podcast@muninetworks.org. Follow Chris on Twitter. His handle is at @communitynets. Follow muninetworks.org stories on Twitter too, where their handle is @muninetworks. Thank you to the group Forget the Whale for their song "I Know Where You've Been," licensed through Creative Commons, and thanks for listening to episode 204 of the Community Broadband Bits Podcast.