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In Reedsburg, Expansion Weighed After Muni Fiber Success - Community Broadband Bits Episode 147
The first gigabit city in Wisconsin, Reedsburg, has a municipal fiber network operated by the city-owned electric utility. This week, we talk with General Manager of the Utility Commission, Brett Schuppner. Reedsburg fiber goes back to 2003, which makes it one of the oldest FTTH networks in the nation. Located about an hour outside of Madison, Reedsburg has seen more investment from local industrial businesses because of its fiber network.
They received a broadband stimulus award to expand their network into some surrounding rural areas and are now considering how they can continue expanding the network deeper into surround Sauk County without federal assistance. We talk about what goes into these expansion discussions - what is the dynamic when one community has a great network and the County would like it to expand? Read all of our Reedsburg coverage here.
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Thanks to Persson for the music, licensed using Creative Commons. The song is "Blues walk."
Brett Schuppner: We've had other businesses that outgrew their location in town and, you know, moved to the edge of town, and stayed within our service territory, to be able to get our services yet.
Lisa Gonzalez: Hello. This is the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. And this is Lisa Gonzalez.
In this episode, Chris visits with Brett Schuppner, General Manager for the Reedsburg Utility Commission in Reedsburg, Wisconsin. The community has its own fiber network, serving residents, businesses, and public facilities. The triple-play network is popular with locals because it offers fast, affordable, reliable service, with no pricing gimmicks. Fortunately for nearby communities, the Reedsburg Utilities Commission was also able to expand outside the city limits. In this interview, Chris and Brett delve in to some of the concerns municipalities face when considering whether or not to extend their footprint. In addition to financial challenges, there are practical and political concerns that must be weighed carefully.
We have several articles on Reedsburg at muninetworks.org . And you can also learn more about the network at reedsburgutility.com .
Now, here are Chris and Brett, from Reedsburg Municipal Utilities.
Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today, I'm speaking with Brett Schuppner, the General Manager of the Reedsburg Utility Commission in Wisconsin. Welcome to the show.
Brett Schuppner: Thank you.
Chris: I'm excited to have you on. We're talking just a few days after Wisconsin had that heartbreaking loss. You know, as a Golden Gopher fan, I was fully with Wisconsin, and deeply disappointed. So, my condolences.
Brett: Well, thank you. Yup, it's a -- it was tough to see it end that way, but it was a great season overall. So, definitely, they could hold their heads high.
Chris: And it definitely seemed like a great group of kids. So, I was -- I enjoyed learning about them. So --
Anyway -- I won't wish you too much luck in the future, though.
Chris: Um, could you start by describing Reedsburg for us? It actually isn't too far from the University there.
Brett: Reedsburg is a rural community about an hour northwest of Madison, Wisconsin. A population of just under 10,000 people. You know, we do have quite a large industrial base in town, with some very large industries and manufacturing companies.
Chris: And what does the utility service provide? I mean, we're going to be talking about the telecom stuff, but maybe you can just briefly recount all the things the utility does.
Brett: Reedsburg Utility Commission is a 121-year-old electric and water utility. We started with the telecom services back in about 2003.
Chris: Right. You were one of the early movers, actually. And you still are one of the premiere communities in Wisconsin.
Brett: We're the only municipally-owned telecom utility in the state of Wisconsin offering the triple-play.
Chris: Right. So you had the -- you had fiber-to-the-home back before it was fashionable. And that's led to, I think, some of the benefits you were talking about with the industrial base. How has the network helped out the community?
Brett: Well, with the network, definitely we were able to provide, you know, gigabit services to our schools. Industries also have gig links between different buildings within town. And also, we do a lot of VLANing to other offices outside of our service territory, by working with other providers, to do that. So, you know, there's definitely a benefit to our customers, to being able to, you know, have that high-speed connection, amongst all their other offices and facilities.
Chris: Now, I've been out there -- twice, actually -- to see the network, and to visit with you folks. And one of the impressions I got is that there's a fair number of jobs in Reedsburg that would not be there necessarily without the network. You have some employers, I think, that expanded more in Reedsburg than they might otherwise have. You don't have to name names or anything, but that's generally my sense. Is that right?
Brett: Yeah. That's correct. We've got some industries that have done some large additions, and, you know, a lot of them have their host servers in Reedsburg, for all their facilities. We've had other businesses that outgrew their location in town and, you know, moved to the edge of town, and stayed within our service territory, to be able to get our services yet.
Chris: These businesses weren't the only things that were expecting. You were one of the municipalities that got government stimulus dollars when -- after the economy crashed, and we wanted to sort of, you know, boost jobs by investing in Internet access, you got some funds to expand some of the rural areas outside of town as well. You know, can you tell me a little bit about that project?
Brett: Back in 2010, I believe, they applied for that broadband initiative program stimulus funding, and were awarded that grant. With that, we were able to construct, outside the City of Reedsburg, we cover about 20 or 25 percent of all of Salk County now, going into neighboring communities and covering the rural area with the fiber optics to the premise.
Chris: So, let's talk a little bit about life now, because when you and I ran into each other in a Wisconsin Farmers Union show, a few months back, you mentioned that you were talking with the county. And there's a lot of people that would be excited to see you expand, although you have the economic reality that it's really challenging to do that. So maybe you can tell us about the dynamic that's developing in the county, and how you're trying to work with the county to be able to offer these services to more people.
Brett: Yeah. I guess the people that can't get our services -- there's a lot of them hear about what we can offer, and the benefits of our fiber network, and, you know, are always asking, are you coming our way, can we get your service? You know, it's just so sparse that a lot of it doesn't make sense. So, you know, the county actually asked us if there's ways that we could partner with them to build out more through the county. And I guess we continue to look at options for that, that make sense for both the county and us. And hopefully sometime we can figure something out that will work with that.
Chris: Now, I'm about 260 miles west of you. What kind of a quote can you give me? [laughs] Now, if I was in Salk County, and I just had the means to write you a check, are you able to expand to people that are sort of in the right condition, and maybe you -- what sort of things are going on into making a decision like that?
Brett: Yeah. I guess if there's a need there that the customer's willing to help support the build, and it makes sense for us, that we're going to recoup our, you know, investment out there, we definitely look at those sort of scenarios. You know, some of them end up making sense, and we move forward. And others, it just isn't practical for the customer or for us. It's just a pure business decision.
Chris: What are some of the things that go into making that decision? I mean, in -- someone who's not doing this on a daily basis, like you are, I sort of think, well, you probably know what the cost is. Or, you know, if I was to say, I'll pay all the capital costs, what other sorts of things, you know, go into it? Is it a matter of just the difficulty of supporting a customer that's 15 miles away? Or -- what are some of the things that you have to think about?
Brett: You know, supporting the customer, that isn't too much of a, you know, issue for us, 'cause, with phones and stuff like that, it's -- you know, we can communicate with those customers easy enough, and respond to them quickly. You know, it's just a matter of the up-front capital costs. If the customers is willing to help support getting that fiber in the ground, you know, that's the main consideration. And, you know, the electronics and all that goes behind it, that's economy of scale there, so a lot of that's already kind of taken into account on our end.
Chris: So, I guess, when you're dealing with this, I'm going to guess that a lot of people who want you to expand are only willing to pay a small portion of the cost that it would take, and then you have to decide, you know, how much is it going to cost over five years, or are we going to pay it back in three years, or five years? Is that sort of the thing that goes through your head?
Brett: Yeah. I guess we kind of, ideally, look for two-year paybacks on builds. Because, being municipally owned, it's not like a private business, where we have -- it's easy to go out and get financing, and be able to finance projects like this. So, we look at ways that we can mainly cash-flow the projects. So, that's where it kind of comes into play, with the customer contribution. I look at it -- like on the electric industry, there. What's our electric service cost, to get to a new rural customer? I mean, they're going to be paying in the $2500 to -- you know, it could be as high as $5000 range, in some instances, for -- to get their electric service. So, why should Internet be any different, if that's, you know, a need of that customer?
Chris: Well -- and I'm going to guess that, on top of that, you know, as an entity that's owned by the City of Reedsburg, you know, you can't really take a lot of risks to try and connect people that aren't even in your city. I mean, you just -- you're there to basically support the City of Reedsburg. And it's great that you're expanding. But, you know, it's one of those things that -- I have to assume that if you were to start taking a lot of risks in the county, the -- some residents of Reedsburg might say to the City Council, what's going on here? Why is this risk on us?
Brett: Yeah. I mean, you hit the nail on the head on that one. It -- why should the taxpayers, like you said, stick their neck out for other townships -- other communities? I mean, the City of Reedsburg took the initiative ten-plus years ago, and stuck their neck out to provide service and support within the City of Reedsburg. So if we could do it, why can't the other communities, if they want similar services? I mean, we could partner with them, work with them, and provide our expertise, and do it at a lower cost, because of the economy of scale. I guess that's the way I look at it, is, you know, either the customer or the other communities need to put a little skin in the game. If they want a service like -- well, like we got, there's a cost associated with it, and they need to be willing to contribute to that.
Chris: So, a final hypothetical question. The state of New York has been proposing, and developing, a $500 million match fund. And I'm just curious -- if Wisconsin was to be able to do something like that, and Salk County was able to basically say, hey, Reedsburg, for every one dollar you spend, we'll spend a dollar, would that make a difference? Or is that still just -- is there still too much risk, even at that rate?
Brett: We could look at each location or situation differently. But, I mean, that would contribute a lot -- take a lot of that up-front, out-of-pocket expense out. Especially if you look at it -- out-of-pocket material expenses. And then the rest is our labor and equipment expense. You know, that's how it could be looked at. And it would probably work out favorably.
Chris: So that's -- it seems like that would be a pretty decent program then. I guess my question is, is -- for any state legislator that's trying to figure out how to structure a program, is that decent for you? Or would you like to see a different kind of program?
Brett: It -- I guess it would depend on the details of it.
Chris: It's better than a poke in the eye, right? [laughs]
Brett: Right. I mean, I would definitely make some headway towards getting some stuff accomplished. It just depends -- you know, like anything, it -- there's no -- it seems like there's no such thing as free money. There's always strings attached, and everything like that. And that's what would really have to be evaluated: what IS attached to that money?
Chris: Right. And I think one other thing is -- sometimes people may not appreciate that -- there's a difference between if you're going -- you know, thinking about running a fiber five miles to connect one home, versus if you're going to a development of 150 homes. There's -- every potential project would be definitely different.
Brett: Correct. Yeah. 'Cause you've got some areas in the township that -- you might only go by a couple potential customers per mile. On others, you might have ten or plus potential customers per mile. It's just difficult to evaluate those situations 'til you really dig into them.
Chris: Well, is there anything else you want to tell us about Reedsburg before we end the show?
Brett: I guess the only thing I'd like to add -- and, you know, we've mentioned the gigabit services. And, I mean, the one thing that we're very proud of is the network that we've built from scratch. And being able to be the first gigabit community in the state of Wisconsin.
Chris: Yeah. I didn't even have a chance to mention that. And I know that, in the past, when I've talked with Dave Mikonowicz, it sounds like your customers have really valued what you have. So, I want to congratulate you, and say that, you know, I'm sorry that I didn't bring that up earlier. But you deserve, you know, all the kudos for being such an advanced community.
Brett: Thank you very much.
Chris: So, thank you for coming on the show.
Brett: It's a pleasure to be here.
Lisa: Send us your ideas for the show. E-mail us at email@example.com . Remember to like us on Facebook. And follow us on Twitter. We are @communitynets . Thank you again to Persson for the song, "Blues walk," licensed through Creative Commons. And thank you for listening. Have a great day.