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Saint Louis Park is Prepared for the Fiber Future - Community Broadband Bits Podcast 219
Saint Louis Park, a compact community along the west side of Minneapolis, has built an impressive fiber network, a conduit system, and several deals with developers to ensure new apartment buildings will allow their tenants to choose among high speed Internet access providers. Chief Information Office Clint Pires joins me for Community Broadband Bits podcast 219. In one of our longest episodes, we discuss how Saint Louis Park started by partnering with other key entities to start its own fiber network, connecting key anchor institutions. Years later, it partnered with a firm for citywide solar-powered Wi-Fi but that partner failed to perform, leaving the community a bit disheartened, but in no way cowed. They continued to place conduit in the ground wherever possible and began striking deals with ISPs and landlords that began using the fiber and conduit to improve access for local businesses and residents. And they so impressed our previous podcast guest Travis Carter of US Internet, that he suggested we interview them for this show. Clint Pires has learned many lessons over the years and now we hope other communities will take his wisdom to heart. Well-managed communities can make smart investments that will save taxpayer dollars and drive investment in better networks.
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Thanks to Roller Genoa for the music, licensed using Creative Commons. The song is "Safe and Warm in Hunter's Arms."
Clint Pires: Fiber is going to be a part of the future. Until we can go faster than the speed of light, that's probably going to be an important part of our communications infrastructure.
Lisa Gonzalez: This is Episode 219 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. This week Chris took a trip outside the studio to visit Saint Louis Park, Minnesota where he could talk with Clint Pires, the city's Chief Information Officer. Back in the 1990s, the community began to realize a vision that continues to evolve but always integrates its high-speed fiber optic network. In this interview Clint describes how the city's partnership with the school district started them on a path that has led to better connectivity for the municipality, local businesses, and even a number of the city's municipal dwelling units. Saint Louis Park is also implementing smart policies to expand the fiber infrastructure as a way to encourage choice of Internet access providers. Now here are Chris and Saint Louis Park, Minnesota's Chief Information Officer.
Christopher Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm sitting here today with Clint Pires, the Chief Information Officer for the city of Saint Louis Park. Welcome to the show.
Clint Pires: Thanks a lot Chris, good to be with you.
Christopher Mitchell: Well I love talking to people in Minnesota, we're right here just a little outside Minneapolis. Why don't you tell us a little bit about Saint Louis Park for people who, I don't know, don't know where a New York Times columnist comes from.
Clint Pires: We do have a lot of famous people from Saint Louis Park, Todd Freeman being one of them.
Christopher Mitchell: Right, the Coen brothers might be my favorite.
Clint Pires: Yeah well I have history here in Saint Louis Park. Saint Louis Park is a community that is approaching about 48,000 people. We have 10 square miles roughly of land. We have about 41 or 42,000 people who come here to work every day in our 2,500 businesses. We have about 23,000 households; 40-45 percent of those are multiple dwelling units, which a lot of people don't realize. We border Minneapolis in the south west close to the chain of lakes, and so that it's a great great advantage for Saint Louis Park. Location! Location! Location!
Christopher Mitchell: Saint Louis Park it's not so much a suburb as it is, it's more like a city, right?
Clint Pires: Yeah we refer to it as micro-urban, I guess, is another way of looking at it because we do have so many aspects of the city life here.
Christopher Mitchell: One of the things that I've long known about Saint Louis Park is that you have some municipal fiber, your schools are connected by a publicly-owned fiber because of an interesting partnership. You don't have a municipal utility so how did you get involved with fiber?
Clint Pires: This really goes back to a longstanding cooperative relationship between the city and the school district, Saint Louis Park School District. As you know we're separate units of government. We're one of the cities where our boundaries are almost coterminous and for a long time on a lot of different issues including community education, sharing of athletic fields, the cities and the school districts have worked together; fiber's no different. Back in the 1990s the IT Director at the school district who is still there, Tom Marble and myself and a group of people from LOGIS, which stands for Local Government Information System, it's a consortium of cities built around IT. We got together and we were actually envisioning the idea someday back in the early 1990s again of being connected by fiber. At that time of course we were relying on the cable company and the telephone company, it’s all copper wire to connect our buildings. Yet it seemed at that time that fiber was going to become more and more cost-justifiable, and indeed it did. School district and the city instead of building separate networks, fiber networks, planned out a joint network. In the late 1990s the school district embarked on connecting their school buildings. In 2004/2005 the city embarked on connecting its city buildings in part over the same cable pathways as the school district had previously built. We did not duplicate those, we just extended to the buildings we needed to so we started connecting fire stations, our municipal garage, our nature center, our recreation center, those kinds of buildings; City Hall and police of course. By the end of 2004, we basically had a joint fiber network, city and school district work together. We cooperate together. We cooperate on maintenance, we have one locate service, and so we have that long tradition again of cooperation between schools and the city. Over time we continued to add fiber to the city network. School district was pretty much done at that point once their buildings were finished, but our City Council said, "It really makes sense whenever we reconstruct a street and the ground is open to at least put in fiber conduit even if we don't put fiber itself." We've taken that approach since about 2006.
Christopher Mitchell: Is that true of every street more or less? Is it a case-by-case basis? If you're like in a purely residential neighborhood, is it still done there?
Clint Pires: It is still done there. The only places we don't do it are the places where we already have the fiber conduit. The idea in the City Council's mind and what I've tried to promote is that we don't know when and we don't know who's going to use it but we really believe that fiber is going to be a part of the future. Until we can go faster than speed of light, that's probably going to be an important part of our communications infrastructure. Again it could be the city that uses that to connect buildings, it could be a private vendor that comes in and says, "Hey, we're interested in leasing some of that fiber infrastructure that you have, and we're willing to pay you for that." The point is there's no real reason for people to duplicate that, and if the infrastructure exists why not lease it? It's like turning looking back in the old days and we said, "We're going to put roads everywhere because along roads come economic activity and economic development. We're really seeing the same thing in the 21st Century. Our digital future is really our economic future as well, and so maybe fiber's really becoming the road to the 21st Century.
Christopher Mitchell: It's interesting because you said it's a little different from when you might be leasing lines. In the Twin cities I'm an avid bike cyclist which means I almost always bike west. There's a few places I can go east, north and south but this county has the best bike trails in the metro. And coming here I was like your water towers they have, you're leasing that space to telecommunication providers and so leasing fiber is not that much different from that asset that you're already leasing.
Clint Pires: Absolutely. We have three elevated water towers in Saint Louis Park, we have long-term indefeasible rights of use agreements basically, long-term agreements with many of the wireless carriers. You're actually right Chris, there's no difference re-leasing this as a fiber asset; it's available. We identify what fibers we need now and in the future, and then the fibers that are still available are the ones that we're making available for lease.
Christopher Mitchell: Right. Now you have an official statement, did you want to read that to us, what motivates the City Council and where they put that on?
Clint Pires: Sure, yeah sure I'd be happy to. City Council has set some major priorities between 2015 and 2025 and one of them was around broadband. They basically entitled it "Saint Louis Park is a technology-connected community." Why is this important to the City Council and the city of Saint Louis Park? What we believe is a community's broadband speed and capacity requirements continue to grow, as technology and the Internet continue to evolve. A community that is connected by a very robust and comprehensive broadband system will set itself apart and be better able to provide free economic growth, innovation and community development. High-speed broadband enables the exchange of information in many different forms and is vital to the high tech community as well as the medical industry and to the delivery of services and education, health, government, public safety, and for overall quality of life. Given the significant amount of fiber infrastructure in place that is owned by the city, which we recently discussed, we are uniquely situated to take advantage of the digital economy. That's the belief that our City Council and our community has, and so we use that as a mechanism by which to create strategies and goals and action plans to achieve what that statement says. Of course it's a long-term effort. Really at the base of it it's around community development; we don't do technology or fiber for the sake of technology and fibers for some larger goal. That larger goal is around being a competitive city where we can attract and retain people who want to live here, who want to work here, and who want to stay here. In order to do that we need to more than just be in a good location; that's a great help but it's not enough. We think that broadband in all its forms provided by a wide variety of players, certainly not just the city, the city is just a partner in this, is one way of maintaining that attraction.
Christopher Mitchell: One of the things that I've heard from other Minnesota local governments, St. Paul, Ramsey County, where I've had some of these discussions is some pushback. They'll say, "Even though conduit doesn't cost a lot of money and we agree that we'd like to be that kind of community” where you just read that statement. They believe that the high tech jobs that it's important to figure out ways of attracting them. They'll say things like, "You know there's that it costs a lot to put a conduit in; that's money that we could spend elsewhere where we know we're going to get a return on it whereas conduit is an uncertain return." Has that come up at all here in Saint Louis Park?
Clint Pires: It has really not because I believe in part our City Council sees the future benefit of high-speed communication. That one of the things that we have found over time is that when the opportunities come along we need to be ready. One of the things that we're going to talk about a little bit later I think and maybe right now is this leasing arrangement that we have for fiber. Whatever success we've had in leasing fiber, and we've just started and we have a few agreements signed now, is because we had the conduit ready, where we had the fiber strands available, we had interested players. Not everybody is interested by the way in the private sector in leasing from government.
Christopher Mitchell: Right right. There's a number of very large firms that have cast a -- They have no interest.
Clint Pires: They have none whatsoever, and you have a template agreement ready to sign. Our City Council directed me and other staff members to put together basically an agreement template that we can use whenever an opportunity comes along in a company. Frankly they've been small companies most far so far want to lease from us they can sign a shot-term lease agreement. Or they can sign an indefeasible Right of Use agreement, an IRU and it's there and it's ready.
Christopher Mitchell: For our listeners I think there's a difference between if you're going to commit to 20 years. That's the IRU approach.
Clint Pires: Correct. It's similar to the approach that is taken for example the water towers that we discussed earlier with the wireless carriers. I understand they've got a big investment, they want to have an assurance that they're going to have the ability to use that asset for a long time. That readiness is critical, it's absolutely critical. We're seeing the results of that now. As we built our fiber network over time by putting conduit in the ground, or MnDOT might be coming along Highway 7 and they're putting in fiber for their traffic management system, we put in fiber right along with them. It doesn't cost us very much and we have it available. We are now to the point where we have about 50 miles of fiber between school district and the city in Saint Louis Park. Again we're only 10 square miles and we're about 120 miles of streets. Well we're approaching about 45% of those streets having fiber on them. Now when a player or a small company wants to come in and maybe connect up one of their customers, there's a good likelihood that we're going to have fiber close-by.
Christopher Mitchell: Are those are they generally looking for a business customer or residential customer or a mix?
Clint Pires: It's been primarily to this point a business customer that they're trying to serve. Over time we believe that fiber to the premise is going to take off. That yes there was a time when copper was king and there was a time when coax was king. Then we really believe that fiber is going to be the next king or queen.
Christopher Mitchell: I want to come back I have a couple of quick questions, but I wanted to raise something, and it's interesting to me you community remains very bullish on this despite significant hiccup, a bit of history, which was a lot of cities either went down the Wi-Fi path themselves or with partners. You guys attempted to do a solar-powered Wi-Fi project that didn't end well, but you didn't give up; you learned from it. Is that what I'm to understand?
Clint Pires: Yeah, it was an interesting experience obviously to go down that path and a lot of cities did. It was unfortunate that our provider at that was not able to deliver on that system. I remember very clearly in the aftermath of that going to coffee shops here in Saint Louis Park and I'd be recognized. I think the thing that really struck me was people coming up to me and saying, "Aren't you the Wi-Fi guy?" Of course I'm getting ready-
Christopher Mitchell: “No, I’m the guy that’s saving our city millions of dollars from having this because we have smart telecommunication policies so we're not leasing for our schools and everything”
Clint Pires: Right, and I'm going, "Well that project didn't go so well," and they said, "Yeah it didn't go so well." The residents were saying, "It's too bad the company didn't get that done," and their next question to me was, "What are you going to try next and when are you going to do it because we're still interested in having competition and choice." That's part of what our community is telling us is that “City Council get us competition and get us choice.” The worst thing in the world is to have no choice, where we get backed into a corner. The City Councils continue that policy and say, "Okay, the Wi-Fi project didn't work out. After the law suit was done it cost us about a quarter of a million dollars. In the big picture, it was worth it." One of the things that we got as a result of that lawsuit was some excess fiber that was built by the provider added to our network. We're not looking at being the ISP in the future, we are saying that we could be a provider of some of the infrastructure though. Cities do pretty well at infrastructure.
Christopher Mitchell: Well let me ask you then, we have a situation back to the leasing of the fiber where you have company A comes in and connects a bank and next to the bank maybe is another business. Is the conduit near that? Do you have extra conduit? How do you make sure you're not, you don't run out of it pretty quickly?
Clint Pires: It's a good question, there are
two things: one again we identify the available strands of fiber that we have in any given conduit and we're typically leasing fiber strands not the entire conduit in which the fiber cable exists. The other thing that we did was we out in typically two conduits when we put in the fiber conduit infrastructure. The incremental cost of putting a second conduit when you're boring is very minimal. Now we have the ability to go back and add fiber to that empty conduit should we need that capacity in the future. Of course as the cost of fiber continues to decrease, it becomes more advantageous to do that. It's really
two things: we're looking at using up the available strands that we have; we don't know how long it's going to take. Yes it is a first-come first-served to some degree in that regard, but we've made this available to any of the private sector players who are interested. In the future if we have more demand we can go down that second conduit and add more fiber strands.
Christopher Mitchell: Okay, so then the last question on this, I'm a little off-script because I just get enthusiastic about where we're going with this. You are more of a technical person that has a lot of experience with this. You said, "Yeah we just put fiber in the ground or conduit in the ground when we can." How do you make sure that the conduit is broken or that you have that, not broken in the sense of not working, but that you can get out of it where you need to. If you want to connect an apartment building in the middle of a block, how do you make sure that somebody doesn't have to go to a handhole half-a-mile away come out, and then run it all the way back?
Clint Pires: Sure, sure. You just try and put the handholes the access points at strategic locations. It's also true that you can go back and add access points handles along the fiber network where you need it if it happens to be that the ones you have don't serve that particular need. We're seeing that right now with folks who are coming in and leasing from us. In fact what they'll often do and typically do is put their own handhole next to our handhole to separate access and then we'll just connect them via a conduit. That allows them to lease our fiber strands from us but then use their own handholes to go the customers that they need to.
Christopher Mitchell: Excellent. Let's talk about these agreements because you mentioned that you didn't want to be caught flat-footed when someone's coming up. You presumably have negotiated these sorts of things before otherwise cities will have the same sort of situation. How were you ready for the first negotiation to make sure that you have done your homework and you can make it easy on the provider?
Clint Pires: We kept getting approached by different people when we weren't ready. They weren't all that serious at that point but they were approaching us.
Christopher Mitchell: These are maybe local firms?
Clint Pires: Yeah local for the most part local, small firms.
Christopher Mitchell: That might be looking to connect apartment buildings and businesses and that sort of thing.
Clint Pires: Right, and what they're looking for is a way to get from point A to point B without having to build their own infrastructure and they lease from us instead if we happen to have a conduit there. What we did is we engaged a consulting firm, Columbia Telecommunications Corporation which has done work for us in the past.
Christopher Mitchell: Which almost everyone knows as CTC.
Clint Pires: CTC exactly. They do what they do some great work, they had done a fiber study for us in 2012.
Christopher Mitchell: One of their employees lives here at Saint Louis Park-
Clint Pires: That's right, that's right. We engaged them to study rates for fiber leasing around the country. It was all over the board, but we got a sense of what going rates were and there were a couple of communities here locally that were starting to embark on leasing fiber. We got a sense of what those rates were and those are the rates that we essentially built into our template, our template agreement. Now what makes it easy we've got all the other conditions there and then we have this area that identifies the segment that's being leased, the length of that segment and then times a price per strand per mile. That allows us to complete the agreement essentially as long as the provider's okay with that particular rate. In some cases we're looking at swapping assets as well. Let's say there's a company that comes in and says, "You know, we'd like to lease this from you and in exchange we have this other asset and if you find it valuable would you be interested in that in lieu of a per strand per mile rate. That's another way of doing it so we may be looking for connectivity in a part of town where we don't have it for some reason and we're being offered that. We'll take that in exchange. Of course we have to assign a value to that that is at least equivalent to what we would have gotten through the payment.
Christopher Mitchell: Great. It's really wonderful, I keep thinking to myself just even though you have the most enlightened City Council or there's been a lot of background work. I remember we did this case study on Santa Monica which has also done tremendous work around this, and I was speaking with Jory Wolf about it and I would say, "It seems to be amazing that they let you reinvest the savings that you created," and he said, "Well yeah, but I did a lot of work explaining the value and that sort of thing." Do you have advice for other CIOs or people that are working with the council that might be doubtful as to why all this effort is worth it?
Clint Pires: I think it has to do with looking ahead and being willing to take some risks. Obviously we're one of those communities that have taken some risks, and they all haven't worked out; the Wi-Fi program's a good example of that. There has to be a culture in this community not just the City Council but the community as a whole that says, "We expect our government to be on the cutting edge. We expect the government to be looking ahead to keep this a healthy place. We need to be looking in the future." We've had and are on our third round in Vision Saint Louis Park. What was Vision Saint Louis Park? It was the community telling the City Council what it wanted Saint Louis Park
to be: housing, transportation, economic development, redevelopment. Same thing happened in 2005, the same thing's happening again 10 years later we just started a new process. From that big cultural movement of looking forward for the next 10 years comes the attitude that we need to prepare in all ways. One of those ways is communication, and the ability for people to live here and to work here in a very dynamic way, in a way that enables them to connect with the rest of the world. When you have a culture like that, it allows for these kinds of effort. I don't think it's about the technology itself, I think it's about creating the culture that says, "We're willing to take some risks for the sake of succeeding, with the idea of succeeding." The idea that you won't necessarily succeed every time but you're moving the ball down the field and you're thinking forward, you're not thinking back. You can't be afraid. You've really got to be willing to try some new things. Again our City Council if you were to be in a meeting with me and them, you would find them being more aggressive than me. I'm probably the more conservative one because I do know what goes in to making these things work, nevertheless they are the ones who provide me with the inspiration and the adrenaline to say, "Let's try some new things," because no matter what's happened in the past, you know what, our community still wants to try new things.
Christopher Mitchell: I think it's just worth making sure people are aware. You have Comcast here, I'm sure you have some of the best service that Comcast provides in any of its markets in the Twin cities. I'm guessing CenturyLink has made some of its gigabit investments in this community. You're not at backwater where you have to, you're looking at providing a choice and making sure that you're ready for the future.
Clint Pires: Right. We have a CLEC it's providing a lot of their services including fiber. The last milestone might be copper in most cases. Comcast is doing something similar with coax and fiber. What we're looking at now is what is that next wave? Many of us including myself believe fiber directly and completely to the premise is part of that next wave. It's not for the exclusion of the others, it's to add a choice to the others. It's to provide some competition that hopefully makes it the pricing better for our residents and businesses as well. Also to say if we're going to take advantage of what's coming in the future technologically, we believe that fiber provides the capacity for that in a way that very few with any other technologies really do.
Christopher Mitchell: That leads us really nicely into the final topic which is apartment buildings but in the back of my head I'm been meaning to work this in somewhere. That's just in addition to providing that vision for the future, have you ever calculated the kind of cost savings you're seeing by self-provisioning, just for the municipal assets?
Clint Pires: Sure sure, in fact that goes back in history when we first connected the city buildings. In 2003 when we were doing this analysis, at that time, we were paying approximately $45,000 a year to connect our city buildings and network them and connect them to the Internet which was starting to take off, and the web of course was starting to take off. What we discovered was that it would cost us about $380,000 to connect all of our city buildings with fiber ourselves. Your ROI is maybe 8 or 9 years.
Christopher Mitchell: Right, with all the operations it could be 10 or 11.
Clint Pires: Sure, and so of course you look at the obsolescence factor. Is fiber going to deteriorate and if so how long is it going to take? Secondly, is it going to become obsolete? You guess, and you don't have to guess too hard because we've had Transatlantic and Transoceanic fiber for a long time that isn't deteriorating very fast. We figured that the life of that asset is going to far exceed 8 or 9 years. Then we looked at the potential obsolescence and again until things can go faster than the speed of light it's probably going to be a player. It became an easy justification to say to our City Council, "We'll get our money back within about 8 or 9 years. We're going to build the capacity in fiber and have the capacity in fiber for bandwidth that far exceeds T1 lines, back in the old days, you remember, and we're looking at, like, we’d get 1 megabyte per building that we were sharing."
Christopher Mitchell: In that cost allocation for a 9-year payback requires that you would have paid $45,000 a year continuously-
Clint Pires: Correct.
Christopher Mitchell: -when in fact we know that probably you would have been close to the $500,000 a year by the end of that 10-year cycle.
Clint Pires: Exactly, the prices weren't going down at that time.
Christopher Mitchell: Right, they were going up and then your needs go up. Not just that I would guess that owning your own network provides you with a higher degree of reliability. When your first responders are depending on that network, you need to make sure that you really have full control of it.
Clint Pires: Exactly, exactly, and that's what led into then of course when you own a fiber optic network part of what you're relying on is the availability. Much of what we've done in the city here, and putting in fiber and conduit in some of these construction project, is it's enabled us to get redundant paths to the different city buildings because there's something called fiber cuts right now-
Christopher Mitchell: Even a tornado came through not far from here just 2 or 3 years ago.
Clint Pires: Sure, and that's the other beauty part because all of our fiber infrastructure is underground in our case. We're far less susceptible to above-ground damage on poles and things like that. Our reliance on it is great, but so is our availability. You put all those factors together of cost, the ROI, the speed and it became a fairly easy decision for this City Council to say, "Go forward and do this." As the benefits accrue, because first we were carrying data between the buildings, and then we were able to add telephones when we went to Voice over IP, and then we were able to add video through surveillance cameras, and then we were able to connect our 800 megahertz system via fiber instead of building a giant tower to the Hennepin County Sheriff's office. Now you've got those 4 different types of technologies that you're able to carry over 2 fiber strands to each building. The benefits just grow and grow and grow. Our staff sees it, our City Council sees it; it really has paid off.
Christopher Mitchell: I mentioned that we were going to lead into the-
Clint Pires: Apartment buildings.
Christopher Mitchell: -apartment buildings.
Clint Pires: Sure.
Christopher Mitchell: This is something that has come up in cities across the country where they're trying to figure out how some of them you're looking at a good solution for the single-family units, single-family homes where a person owning a home they can choose what provider they have. If you're renting you may not have that choice. As I understanding you've worked out some voluntary agreements and maybe there will be some opportunity in the future to put that into a requirement.
Clint Pires: Mm-hmm (affirmative).
Christopher Mitchell: Let's start with where you are, what have you done with some of the I'd say more forward-thinking building managers and landlords?
Clint Pires: Well another piece Chris came out of the 2012 fiber study was the idea of working with MVUs or mixed-use developments where there's maybe commercial as well as residential use of buildings. Trying to find a way to encourage them to provide the capacity for broadband within their buildings as they're developing them. We started with newer developments, and it's typically re-developments. As you know Saint Louis Park is a pretty fully-developed community, so when we see development it's usually something else being torn down and something new being built. We started a couple of years ago working with some of the new developments. We have been able to encourage them to provide broadband capacity within their buildings and to their buildings. Specifically what ends happening in the way we've written up some of these voluntary agreements is to first try to be reasonable, what's going to work for the developer and what's going to be most cost-effective for the developer. The idea is to build capacity in the form of 2-inch conduit between their building and the public right of way where there typically is our telecommunication providers or will be telecommunication providers in the future; high-speed telecommunication providers. That conduit goes to their point of presence, their telecommunication point of presence in their building. Then from that point of presence it goes to each of their wiring closets, typically 1 per floor. Then from those wiring closets we're requiring 2 connections to each living unit and working unit that are capable of gigabit speeds.
Christopher Mitchell: Cat-5e, Cat-6?
Clint Pires: Right exactly. The carrot here if there's carrot is to say, "Look, we can provide you those specifications and when a high-speed provider comes down the road in the future, literally down the road, they'll be able to tie in to the conduit that you've put out there. That will give you an additional provider beyond the current cable company or the current telephone company. This will make you broadband-ready for them and whether you do come along, they'll know you're there, it's easy for them to give in because the cost of doing that retroactively after the building is built it's pretty high. While there's building there it's easy to add this capacity now as you're building and it's less expensive and it will be more attractive presumably for your clients as well to know that your living units and your working units are already waiting for that provider to come by. Now that is conjecturing that some day in the future broadband is going to be available pretty ubiquitously throughout this community and that people will want it.
Christopher Mitchell: From a different provider?
Clint Pires: From a third provider.
Christopher Mitchell: Right. When you look at the kind of investments we're seeing, increasingly those apartment buildings that are ready for competition and have landlords that are ready to welcome that in, it's a really ripe target for some of these smaller firms or Google. You have a range of companies that are looking for those kinds of opportunities, especially when this landlord will know that the city has a way of in most cases or in many cases helping that provider get from Minneapolis perhaps to that wiring closet. It's not like a small firm will have to build up their fiber network all the way down the street to finally connect to that apartment building.
Clint Pires: We've seen this with US Internet in Minneapolis, and of course those buildings existed so US Internet has to do, for example, a lot more work to get into a multiple dwelling unit or an MDU. We're trying to make it ready for a player like USI or somebody else to come in and will easily get in there. We have-
Christopher Mitchell: Right, and sorry I was just, for people who aren't aware the Google bought this company Webpass which is doing this in 5 major cities. I think it woke up a number of people in the media to this model of just focusing on apartments buildings. There are providers all across the Twin cities, there's probably at least 3 or 4 that specialize only in apartment buildings so you have those sorts of players that are interested. This isn't very speculative is what I'm trying to say.
Clint Pires: Right, it's happening, it's happening absolutely. It's really been interesting because in the 7 deals that we've been able to negotiate without any ordinance.
Christopher Mitchell: Handshake agreements with landlords.
Clint Pires: Well it's more than handshakes, we put it in a - There's usually a development agreement, but we did have an ordnance in place that required it. We sat down with them and said, "Here's what we think is good for you for the business and what's good for our, the people who are coming here to let's say live or work in that mixed-use development. The developers get it; they understand. What this does is simply clarify for them what they need in order to be prepared. We've had none of these 7 developers go away and say, "This is a bad idea."
Christopher Mitchell: Which would be their right if they wanted to.
Clint Pires: It would be, it would be absolutely. We've been able to use them to essentially an experiment to say, "Can we make this work? You've made it work voluntarily and now we're putting those same requirements, yes in the form of an ordinance, just to make it simpler," but because we haven't had any resistance to this. I truly believe that market is going in this direction anyway and that smart developers will understand that. Again we've just clarified it for them and now we can go forward and make it a standard requirement. We were able to do a deal sometime ago with the West End development over there in Park Place Boulevard and 394 back in 2008 when that went live. Part of that development agreement included something like this, not quite as mature as this, but we did get very similar requirements put in with Duke Realty at the time for the West End. I do believe that developers don't see this as an owner-risk kind of thing, they see it as a smart thing to do.
Christopher Mitchell: Are these all new buildings?
Clint Pires: The ones that we have done thus far-
Christopher Mitchell: The 7.
Clint Pires: - are new buildings with one exception, and that is Meadowbrook Manor which has been here for quite a long time. They voluntarily as they're redeveloping part of their complex putting in a new complex said, "Yeah, we'd like to put conduit in from that new clubhouse out to the public right of way, and we're hopeful that somebody's going to come in and serve us as well.
Christopher Mitchell: The reason I ask is that there is a significant group of building managers or landlords that are saying, "We prefer to get these marketing payments," which is what they're called, "From the incoming provider, and we prefer to try to limit our tenants to just one option because that gives us some extra $20,000/$30,000 a month depending on the size of the unit." Just throwing some numbers out there. It sounds like maybe are you dealing with developers rather than the building managers, and it's earlier in the process maybe they're more receptive at that point?
Clint Pires: Correct yeah. Of course that's a grey area sometimes when does the management come in, and you start to deal with them versus the developers themselves. At this point yes we've been dealing during the development agreement. Period. I understand what you're saying and of course it's the right of that building owner or manager to have whatever agreement they want. What I believe is people like competition, people like choice; that's such a theme that we hear from our residents and businesses. That's something we can help do; we can't be the provider but we can set the environment in which choice and competition can really exist. It does occur that some building managers do that, and I believe that they will hear from their tenants, be they residents or businesses, "You know, I've heard about this other provider out there. Have you thought about allowing them into the building?" If that other provider's offering is compelling enough, I truly believe that that will shift the manager's stance.
Christopher Mitchell: Great, well this has been terrific. I really appreciate you taking all this time to walk us through it. I think you're doing some really great stuff. In my work with Next Century Cities, we deal with people around the country that are coming to us and saying, "Where has anyone done this MDU agreement?" I think you might actually be the second, although the people that did it first in Loma Linda, California, it's more or less incomprehensible to most of us what they did. The way you're doing it I think will actually be replicable more widely.
Clint Pires: One of the other areas we're looking at is single-family homes. Not trying to make it onerous on the homeowner either. I believe that the fact that we're going down most residential streets here as we have the opportunity to put in fiber infrastructure is about the most and the best that we can do. If I look at other examples let's say next door in Minneapolis if the conduit is in the ground in a residential area, it's relatively easy, relatively easy because nothing's easy, relatively easy for the provider to go from there into each of the homes. I'm not sure they have to do exactly the same things that an MDU or other complex would have. It's exciting time to be here, and it's an exciting time to be working in fiber.
Christopher Mitchell: For 20 years.
Clint Pires: Really looking at the future and sort of like planting a tree, this will I hope one that'll outlive me.
Christopher Mitchell: Terrific! Well thank you.
Clint Pires: Thank you very much for your time.
Lisa Gonzalez: That was Chris talking to Clint Pires, Chief Information Officer from Saint Louis Park, Minnesota. They were talking about the community's fiber network and the policies they use to encourage expansion and competition. Remember we have transcripts for this and other Community Broadband Bits Podcasts available at muninetworks.org/broadbandbits. Email us at firstname.lastname@example.org with your ideas for the show. Follow Chris on Twitter, his handle is @CommunityNets. You can also follow MuniNetworks.org stories on Twitter where the handle is @MuniNetworks. Thank you to the group Roller Genoa for their song “Safe and Warm in Hunter's Arms” and licensed through Creative Commons. Thank you for listening to Episode 219 of the Community Broadband Bits Podcast.