Fast, affordable Internet access for all.
A Scattering of Wonks - Episode 569 of the Community Broadband Bits Podcast
Naming groups of things is one of the few pure joys in life. But despite having a shiver of sharks, a thunder of hippopotami, a discovery of witches, and about a million others, as of yet we've got nothing to describe a group of Internet access and infrastructure who have forgotten more about the business of broadband than the average person is likely to ever see, smell, or hear. From the economics of building fiber networks to the technical challenges of different radio spectrum bands, they separate the signal from the noise every single day.
So how about a scattering of wonks?
This week on the podcast, we bring over the most recent conversation from our Connect This! Show, where for 80 episodes we've hosted broad discussions about broadband policy and infrastructure deployments and live by the mantra that the devil's in the details. Christopher is joined by Travis Carter (USI Fiber), Kim McKinley (UTOPIA Fiber), and Heather Gold (Mears Group) to tackle a host of issues, including why we don't see more cities doing deals with entities like Google Fiber, what we can expect now that Anna Gomez has been confirmed to the FCC, what it means for BEAD grantees if the Affordable Connectivity Program goes away, and more.
Along the way, they hit on what we're seeing in Vermont's Communications Union Districts, a partnership in West Des Moines, Iowa, and whether there's renewed hope for the ACP as it nears the six-month mark from running dry.
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.
Christopher Mitchell (00:00:37):
Welcome to a special episode of Connect. This should have seen my smile when I realized 10 seconds ago what I was going to say here. I know that Kim is going to love this. Ordinarily we have a guest on the show, Douglas Dawson, but today we are Douglas. No, Doug Douglas.
Travis Carter (00:01:01):
Not bad, not bad. Alright.
Christopher Mitchell (00:01:03):
Alright. I'm Christopher Mitchell with the Institute for Local Self-Reliance. Please do not penalize them for my lack of creativity or suaveness. Kim is with UTOPIA Fiber. Welcome Kim.
Kim McKinley (00:01:16):
Thank you. Thank you for being here. And I mean, I love the pity laughs the other panelists gave you, but I just gave you an eye roll, but it's good to be here, Christopher.
Christopher Mitchell (00:01:25):
Excellent. We have a lot of subjects to talk about today and we're always open if people want to throw anything into the comments of what we can suggest. We got a number of suggestions on LinkedIn from Reuben, so looking forward to jumping in on some of those. We got Travis Carter from U S I. Fiber. Welcome.
Travis Carter (00:01:44):
Good day, sir. Good day. You enjoying the weather here today?
Christopher Mitchell (00:01:48):
Oh, it's pretty nice. I went out last night and I saw the US Men's national team play over here at Allianz Field in St. Paul and I was chilly. I was literally cold coming home from the match, so it was nice. I'm enjoying it.
Kim McKinley (00:02:04):
Were you on a bicycle or were you in a car?
Christopher Mitchell (00:02:06):
I was on a bicycle and because I can bike to the stadium, it's only a mile away and it was chilly there. I went to the Honduras game in February where I think it was like negative three degrees. This was like 57 degrees. So much better. And we were joking that if this game happened in April, we would actually be out there in t-shirts feeling great, but because it was the end of summer, we were actually cold. Heather Gold, welcome back.
Heather Gold (00:02:36):
Christopher Mitchell (00:02:39):
I am thrilled to have you back. We've invited you a few times. Unfortunately, you're often traveling in the orbit of Kim, so if Kim's not available then you're often not available too.
Heather Gold (00:02:48):
I live on an airplane.
Christopher Mitchell (00:02:51):
We are going to tap into I think some of that expertise that you bring, Heather, the insight into the industry with some of our questions today trying to, I was kind of to avoid some of the ones that I know Doug would really want to dig into. So today we are going to be talking about some of the models for partnerships and why some communities don't bring those. Don't jump into those. Maybe we're going to talk about the states relying on a C p and what they might be doing. By the way, I know that my screen's flickering. I have no idea what's going on with this. It's like a motherboard issue. I have died, different cameras and whatever, so I'm sorry, I'm a flicker guy. Today we're going to talk about the letter of credit, whether that's having any movement. We're going to talk about this Wall Street Journal article, which was not terrible, but I think was kind of terrible.
This is the article about the $53,000 connection and I felt like it was done in a way by a guy who's a good writer, who knows this stuff, who didn't want it to be clickbait, and it was kind of promoted by an editor that wanted it to be clickbait. I feel like there's a little tension there in it. So we'll talk about that article though. There's some questions about why people don't understand the importance of having a high capacity connection and why they might be focused on other things or dismissing that. Talk about Commissioner Anna Gomez, F C c Commissioner once again, I called it right? She was put on the commission. Quickly, we're going to talk a little bit about AI and customer service.
Travis Carter (00:04:32):
Pause once again. You were right.
Christopher Mitchell (00:04:34):
Yeah, no, once again, I'm saying I was right. I was right one time and this is the second time I've noticed I was right that
Travis Carter (00:04:40):
One time. I think the perception of people was, you're right, often, and I think it's three to zero chicken wings right now. So
Christopher Mitchell (00:04:49):
Yeah, no, that's the case. And I think on Friday I'm going to make good on a little bit of what I owe you.
Travis Carter (00:04:55):
Christopher Mitchell (00:04:58):
And maybe a little bit about charter and rural stuff if there's time, but there's always room for question or comments. Juan, if you have anything you want us to say, you better be real nice about it. I think you gave me a negative one for my Douglas joke. So big trouble there, but I wanted to dive right in. I saw a story that is pretty cool from Vermont Digger, VT Digger. It is a place I've gotten some news about Vermont over the years. There's some independent reporting and Vermont has these public utility districts. No community utility districts, community union districts, communications union districts. You could get that wrong. A lot of different ways. It turns out, yeah, union has communications union districts. No, Vermont has communications union districts. Maine has broadband union districts. At any rate, communities get together to resolve these issues. A number of them in Vermont, these different towns working together, we're going to work with Google Fiber and then decided that, well, I don't know if they decided, but it didn't work out with the model they wanted to do with Google Fiber and now they are working with Great Works Internet, G W I, which is a fantastic network out of Maine, been around for a long time, but it caused me to think a little bit about how much I think that this model, which I think the Huntsville model is good.
I know that it's controversial among some folks. I think the West Des Moines model is really great. So I want to start by talking a little bit about that and why we don't see more cities doing it. I've been surprised we haven't seen more cities saying we want that Google fiber magic and we're going to use that model. Kim, do you want to describe that model quick? Because otherwise I'm just going to keep talking and talking and talking. Yeah,
Kim McKinley (00:06:46):
I just think it's basically the city. Either they put in the conduit or they put in the fiber, the private sector, which in this case is Google will do the drop to the home and offer the services inside the home. But I have to flip the script on you, Christopher Mitchell. What if it's Google who's pulling out of some of these models who are saying these markets might not work for us. I mean, I don't know what the case is, but I think that we're just assuming that the city pulled out. But do we know any differently on these?
Christopher Mitchell (00:07:17):
I think there might be a combination, but my sense is that Google has fewer of these deals than they would like to do.
Kim McKinley (00:07:25):
I think they're doing pretty well. I think they're just lower key about some of these. I think they're
Christopher Mitchell (00:07:29):
Works. No, think Google. Google has broadly Google fiber to be clear. It is a, it's
Kim McKinley (00:07:34):
GFI now. They just rebranded. It's G Fiber. Yeah,
Heather Gold (00:07:36):
It's G Fiber
Christopher Mitchell (00:07:38):
Really? Okay. Not on board. Gfi. They have two broad models that you could put in their buckets. One that they just keep announcing New city after new cities where Google comes in, they build the network, they own the network. What we haven't seen is more announcements with GFI where the community owns the asset, like the conduit in West Des Moines or the fiber in Huntsville and GFI commits to a 20 year long-term lease for that and others can use it as well. So I, I mean think we've seen GFI announcing a bunch of new deals with cities, but I don't think we've seen any of these partnerships coming about recently.
Heather Gold (00:08:27):
So I would think, well, first of all, maybe the city, I mean Google fiber may not see the value in a particular city. I mean that may be one, the economic value might not be there for them. And then Google fiber itself or fiber, which somebody just posted is the G is silent, might decide even in these Vermont, the Cuds or the PUDs, it's not enough what they have to pay versus how many subscribers they could potentially get is insufficient to make their business case. So I think as Kim said, there's a lot of things we have to look at who pulled out or who doesn't want them or what went wrong here. Because no matter where the build is, you have to have, this is the whole sustainability issue on these startups. Do we have sufficient subscribers to keep the network going, including supporting a knock operations and maintenance call centers, et cetera, after the build is done, after the capital is spent. I think that's going to be become an increasingly large question. But I mean cities, they may not want to do the investment even though for a lot of them they already have it and I think they just haven't considered that they have a common duck.
Christopher Mitchell (00:10:01):
I think that's a big piece of it. I think cities don't want to put up as much money. And even though Google might be putting up, my sense of West Des Moines and Huntsville is that approach, Google has put up about half of the money, usually less than half, but approaching half of the money that is needed for the capital build and over a 20 year lease of the network. And so they're not bringing the money to the table on day one, but they are committed to a long-term lease of the assets. And I think that cities are not looking to put as much skin in the game as they might have to.
Heather Gold (00:10:38):
Kim McKinley (00:10:38):
Mistake. I think
That cities realize that if they get somebody who's free, that's better than putting up their own any capacity, which I disagree with because I actually believe they should own the asset. But if you're sitting in that city council room and you're saying, I have a free option or I have to bond for 30 million to pay for the backbone, it is a pretty clear answer when you're looking at it from that aspect. You have to get into the aspect of why you would want to own it, why you would want to go down this model. But somebody said to me once, and I thought this was very interesting on Google's behalf of that if you're Google walking into these cities, they're expecting a cash cow that Google is going to come to the table and pay for everything, but
Christopher Mitchell (00:11:24):
It's not Google anymore. It's gfi
Kim McKinley (00:11:27):
Gfi. So they're going to kill us for saying this, but I think that's unfair to them because of their branding on other aspects and that they're getting this reputation in which they'll come to the city and pay for everything that the city wants and be at the city's beck and call. So I think it's a little bit of both.
Heather Gold (00:11:50):
And Kim, they've always been honest about the steps that a city has to take to attract them, and it's like somehow that just goes over everybody's head. They don't realize the hard work that their early cities did to make it worth Google's wild to come and invest like a Kansas City with strong arming the Kansas City power and light to let them have access to the polls, single point of contract, all those preliminary things people don't understand. They have a big investment to make too. It's not just on Google's part,
Christopher Mitchell (00:12:30):
Travis Carter (00:12:33):
Well, my perspective is a little bit smaller probably because I've only dealt with about 12 different cities in my entire fiber career, and I have only ever found one that conduit and fiber even percolated to the top 50 items on their list of priorities.
Christopher Mitchell (00:12:51):
Think they were even aware of it.
Travis Carter (00:12:53):
Exactly. They always, again, from my small sample, they always look dumbfounded. The fact why would we do that? Somebody forever, the incumbents have taken care of it. The other factor that has come up more than once is they're really nervous about disturbing the cable franchise TV revenue they get in. So if a fiber builder comes in, what does that do to their actual revenues? Which is the things that they really rely on.
Christopher Mitchell (00:13:22):
But yeah, some
Kim McKinley (00:13:23):
Cities more than argument, I think that's a dumb argument.
Travis Carter (00:13:27):
I don't disagree with you, but that's just the way they think. And I've also learned what these cities, they think in these little two or four window periods of time, basically from election to election, and these fiber builds. I mean, this is a 10, 20, 30 year engagement. I don't really ever see people that are terribly interested in fighting the long battle. They're just trying to get to the next hurdle.
Heather Gold (00:13:52):
And that's probably why you find in many situations, like in Huntsville and Springfield, the, we've got some expert on the linking in here. It was the utility that worked with Google. I mean it's sort of semi removed. Obviously they had to have permission of the political establishment, but they sort of took it one step removed.
Christopher Mitchell (00:14:23):
And I think this gets to some of the insanity around our system in some ways in that cities should have some predictable amount of revenue coming in from a franchise to be on the poles to deliver any kind of service. However, right now that is different for a cable TV service versus other things. And in some cases that's a real distortion. And so if we lived in a country we're serious about government, whether that was local, state or federal, there would probably be some kind of uniform fee for any wire that is on the polls. And cities wouldn't be worried about promoting one service over another. And I would just say that from Travis, the thing that I said that I spoke at the same time as Kim, is that some cities take this much more seriously than other cities when it comes to that revenue. I think,
Travis Carter (00:15:19):
Well, let's also not forget that again, this is from my small sample size. The city staff isn't real excited about a big construction project in the city. So if revenues are down, they don't have to deal with all the neighbors being angry about there being construction happening. And again, a lot of these people, they don't even live in the town they serve, so there's not a lot of benefit to 'em.
Christopher Mitchell (00:15:43):
Wait, what do you mean? The elected officials
Travis Carter (00:15:45):
Or even the staff, they're just not gung-ho about having the whole city torn up for a year or two and their phone's ringing off the hook. Franchise agreements are going down and they have to deal with the, it's a lot. It's a lot to take in for personally, not a lot of reward for 'em.
Heather Gold (00:16:06):
But Travis, don't you think communities have gotten a lot more sensitive to this since the pandemic? I mean, would've said you're right pre pandemic, but I'm a little surprised that you think that that's still the attitude, the sort of, it's not worth the aggravation.
Travis Carter (00:16:25):
The only thing that's cool that's interesting about the pandemic is it's a really good opportunity to talk about this stuff, but I feel there's a big bridge between talking about it and actually executing.
Kim McKinley (00:16:35):
Well, I think it goes back to education. I think, Heather, that you're right, and I think that Travis, you're right. I think that the cities think that they need this, but once they get into the weeds of looking at all of the dynamics that come along with undertaking a project like this, it becomes overwhelming. And then the private sector, big telcos come in and say, we're going to solve your problems. And a lot of cities are like, oh, okay, let's try this again for the 15.
Christopher Mitchell (00:17:03):
Not only that, I feel like there's two sides of that coin. One is like, we could solve your problems or if you oppose us, we could create new problems for you. I mean, in Lafayette, Louisiana, the cable company, I believe it was, but it could be confusing with the telephone company, one of the interests started making the public utilities life miserable, like lobbying against water rate increases just to try to punish them for having the temerity to build a broadband network that competed with them. And so the cable and telephone companies can play hardball in really nasty ways in a lot of these places. And so that's just the flip side.
So there's a lot more that I think we could dig in on that, but I think it provides a lot of context, and I didn't spell this out, but our LinkedIn user did note. So if people weren't familiar with this, the franchise payments for cable are typically only for the cable service, the linear cable television service, not for other services like home burglary stuff, not for television. I'm sorry, not for telephone or for broadband. And so that's what we're talking about in terms of it being a weird distortion. I want to talk, I think this probably
Travis Carter (00:18:15):
I have one more quick element there that I think key to this is the other thing I hear commonly when we talk to these cities is where am I going to get the budget to hire the people to manage this? I hear this constantly. We don't even have staff to manage the projects we have,
Heather Gold (00:18:33):
Right? But that's where you can get a company like a Google to help you do that. I mean, if they're going to want to ride that network and use it as their own, they might be willing to come in and help you with those telco type of issues.
Christopher Mitchell (00:18:49):
Yeah, I do think that's the case. If I was to make the case, and I think Roger, Kim's boss would probably be angry at us not talking about more detail about whether the go fiber arrangement is good or not for cities, I happen to think it's fairly reasonable for a city that finds one lessor of the network, lessee one entity that leases the network that pays a lot of the costs. In the case of the West Des Moines mediacom is now on it. There might be another one. And so the city has a fiber network that they can use for smart city almost anywhere in the city, and they're paying a pretty small portion of that. And so I think the problem is what Kim had said in part was cities don't want to bring that money upfront. Even if after three or four years they'll be shouldering very little of the costs.
Kim McKinley (00:19:46):
No, I would agree. But I think that Rogers, when he's criticized these models is, and I haven't heard it in a while, so I'll preface that they're open access. He would say that they're not open access because, and we talked about this pre-show is we like at UTOPIA Fiber, our D mark is inside the house at the O N T. A lot of these projects, from what I know, I mean everyone are at the curb. The provider is bringing the conduit and the O N T in the home. So the barrier to switch providers is very high if anybody would do it at all. So I think it's just a difference in opinion and models, but I think it's not a criticism, I just think it's a difference of how people are viewing what things are called.
Christopher Mitchell (00:20:34):
And that's the thing is that if you are a community that wants to have robust competition like you have in Utah, the defi partnership is not that model. If you want to bring in a few potential providers and ensure that you have citywide service and an infrastructure that could be available to be leased citywide, and you want to have a very low cost citywide smart city type of fabric, then that is a good model. But I think people need to appreciate what they're actually getting into.
Travis Carter (00:21:07):
Who would want to compete against Google? I'll always bring that up. There's not going to be a second provider.
Christopher Mitchell (00:21:14):
There is though, are I
Travis Carter (00:21:15):
Think, well mediacom maybe the incumbent cable company, but you're not going to have just an independent go in there and try to compete. And also, let's not forget, west Des Moines is not Des Moines. It's a small part. It's maybe 25% of Des Moines that's even served. So let's not forget that
Christopher Mitchell (00:21:31):
West Des Moines is a wealthy suburb of Des Moines. Let's
Travis Carter (00:21:35):
Keep that in mind. We're not serving the whole city in this project.
Christopher Mitchell (00:21:38):
No, but West Deines is the city. So West Deines is not the entire Des Moines, the city of Des Moines. It's actually its own municipality. Kind of like St. Louis, west Des Moines is the St. Louis Park of Des
Travis Carter (00:21:48):
Moines. Yeah, no, I get it. Yeah.
Christopher Mitchell (00:21:52):
In US Minnesota terms. So like I said, we got to move on to a couple of other topics. The A C P, I don't know, I feel like people are on the hope again. And just our little of our pre chatter, Kim, it seemed to me like you feel like, I feel like a month or two ago we bottomed out and thinking that the A CCP might not be renewed. I feel like people are once again thinking there's a shot at it being renewed.
Kim McKinley (00:22:17):
I think a lot of these programs are dependent on it being renewed. You're seeing a lot of the programs around the country from states saying you have to have a low cost program. You have to partner with a C P. And I'm reading these programs and I'm like, does anybody know that ACP is at risk of not being refunded?
Heather Gold (00:22:35):
And Kim, the scary part is a lot of them don't say, they all say you have to participate in a C P, but they also say you have to have a low cost option. They don't link those two necessarily. So if a C P goes away, how are carriers going to be able to afford a low cost option? That's what I think the big risk is.
Christopher Mitchell (00:22:56):
Yeah, I mean, you might be looking at 30% of your subscriber base in some of these areas, whether you're rural or urban, but a substantial amount of your subscriber base, suddenly you're losing $30 a month on all of those. That's a major hit to your revenue.
Kim McKinley (00:23:14):
But I have a question for Travis. So Travis, you lose every bit of a C P funding that you're getting for the program that you're participating in a c p. Now, would you offer a price point similar to them getting a c p?
Travis Carter (00:23:29):
Heather Gold (00:23:30):
Don't you have to offer a low cost option
Christopher Mitchell (00:23:33):
Though? Travis doesn't have any hooks in 'em?
Travis Carter (00:23:36):
Well, the other thing in our financial models, I don't include the A C P as revenue predictable. In our future financial model, I build all the financial models assuming a C P disappears, because I can't be in a situation where whatever, all this alphabet soup that goes on in the government doesn't happen. We're not having to lay people off because of it. So that's just the way that I choose to do the financial model. But to answer Heather, no, we don't take any federal or state dollars. We do it all privately. Got
Heather Gold (00:24:09):
It. Got it.
Christopher Mitchell (00:24:11):
Now, Travis, does that mean that your models predict that you would have, if a C P disappears, you would lose a certain number of subscribers at that point? How would you anticipate that? Well,
Travis Carter (00:24:20):
We would do a transition. We would tell 'em, Hey, a c P has disappeared. We will give you a period of time to find an alternate solution. If you'd like to stay with us. The current retail rate would be what we would migrate you to.
Christopher Mitchell (00:24:34):
And your lowest cost offering is what, $50 a month right now?
Travis Carter (00:24:37):
50 bucks? Yep. Yep.
Christopher Mitchell (00:24:40):
Kim. Is that sort of how you're going to deal with it? If it comes to pass? Well
Kim McKinley (00:24:43):
Mean. So we don't offer a c p, our providers do. So I think that's a little beast, but I think it's going to be interesting, and I'm going to pivot this conversation a little bit of what is low cost? I mean, I see a lot of these programs say that they need a low cost option, and then I see numbers. Where are they coming?
Christopher Mitchell (00:25:02):
You and Travis keep ganging up on me. I hate this conversation.
Travis Carter (00:25:05):
Heather Gold (00:25:07):
How did they come up with $30 a month? That's the one that blows my mind because it
Christopher Mitchell (00:25:12):
Less than 50. I mean, at a certain point they could have said like, oh, we have this sophisticated argument. They picked a number. It's politics. They picked the number in the middle. That would work for them. Yep.
Heather Gold (00:25:23):
Christopher Mitchell (00:25:24):
Right. In its round,
Travis Carter (00:25:25):
They don't seem to have a low cost property tax model. We can sign up for they, because that doesn't ever go down. But Internet gets slammed on.
Christopher Mitchell (00:25:34):
I mean, I do think we can talk more about this question about what is low cost, but in the past, I would say it ranges between zero and $30 a month with a concentration around 10 to $15 a month is the assumption. However, there are a bunch of things baked into that, and people who have very low incomes often we're able to afford cigarettes and other things that they prioritize. This often comes up and it's kind of an ugly conversation in some ways. I don't think many of us like to be in a position where we're telling other people how to run their budgets, at least for a more libertarian spirit like myself, I'm deeply uncomfortable with those sorts of discussions.
Kim McKinley (00:26:17):
You're a libertarian. Who knew Chris? I'm a
Christopher Mitchell (00:26:20):
Kim McKinley (00:26:21):
I love that. We have our little commenter is LinkedIn user doesn't even really want to show his name or her name that they're watching this very anonymous.
Christopher Mitchell (00:26:31):
I love. Well, the goal is that we figure out who it is by the end of the show. So we have lots of different topics and this person will keep commenting and then we'll,
Travis Carter (00:26:39):
The hundred dollars, that kind of sounds a little ish, doesn't it?
Christopher Mitchell (00:26:45):
Okay. So the other piece of the story, A C P being renewed, but a bunch of states, their entire plan of how to deal with this is basically to rely on the A C P. Now that said, oh, it's Ruben. Now that said, we have seen a bunch of states, a bunch is probably the wrong word. Some states have been willing to step up and they have a lifeline. Their own state lifeline program through U S F. Alabama used its Cares Act money as a subsidy to folks. And so states could subsidize people if the A C P disappears. But I haven't seen many states suggesting that they're thinking about that. They're just hoping that the federal government will solve this problem for them.
Kim McKinley (00:27:29):
But should they, I mean, come on. Should states have to plan for the federal government not to renew a program? I think that's a waste of resources and government at its finest. Oh, just in case this is not going to do, we need to have a contingency plan.
Heather Gold (00:27:45):
Why don't we just work together? How different of that than all the people that fell off Medicare or Medicaid when the pandemic was officially declared? I mean, if you think broadband is as important as healthcare, which more and more people do, then they do see a role for the federal government.
Kim McKinley (00:28:08):
I think there is a role for the federal government. I just don't think the states should have to wait for the federal government to fail and have backup plans for the federal government to fail. I think the federal government should,
Christopher Mitchell (00:28:19):
Where I commit to it I think is that as a frustration that I feel like the states aren't doing enough to have a working market where there is actually some competition and in the right incentives to be building in different areas. And so I think the states should be having a role in this, but I feel like they're kind of just like they keep looking to the federal government and saying, bail us out. Bail us out, rather than actually digging in and doing the potentially unpopular work of upsetting the cable and telephone companies.
Heather Gold (00:28:51):
But it's hard to see how you're going to incent a competitive offering if it's based on government. I mean in small rural areas, if you're lucky to have enough funding for one carrier. Right.
Christopher Mitchell (00:29:06):
But this is where, I mean, I feel like some of the discussions we've had before, and this is where you could try to tease me into a rant, Travis, but I'm going to resist, which is that the states shouldn't be just tossing money at Charter Spectrum and at and t, they should be learning from hundreds of years of infrastructure that the way to build the rural stuff is to have these cooperatives that have an incentive to be financially sustainable rather than using their political power in the state capital to just pull more taxpayer dollars out of our wallets. And I just don't see many states doing that. Yeah,
Travis Carter (00:29:39):
But have you looked at the maps? I mean, it looks like Swiss cheese. How would you build a financial model filling in the holes in Swiss cheese? You just can't. Ah,
Christopher Mitchell (00:29:47):
The question is whether the cheese parts around the holes is actually well-served or if that would also be an area where a co-op could get 50, 60, 70% take rate. I think a lot of those areas might be if you go out to rural Minnesota and you find some spot where Charter or Comcast operates, that's not their best plant. It's not what I'm getting here.
Travis Carter (00:30:06):
But what's the definition of served?
Kim McKinley (00:30:12):
Well, go ahead. I mean, Chris, you can answer this, but I have a different take on this. I was at Fiber Connect a couple of weeks ago and I was talking to a state official in this lovely United States, and he asked me directly, he goes, well, I'm hearing that some carriers won't even bill to some of these areas even if we pay for all the costs. And I'm like, oh, that's absolutely fault. But that's the incumbents and the local providers who are telling you that. So you don't give any money to anybody who can challenge what is happening. So even if the states are saying, we want to bring competitive options, they're hearing from these local minorities and very loud saying, oh, just give it to us because nobody else is going to do it, and we're already here, so don't worry about it. So it's not just that they don't, I think that there's a lot of obstacles that go in between that as well.
Heather Gold (00:31:04):
And actually what I would say guys, is that brings up my big issue, which is clustering for economic sustainability, which is putting together grant areas, even if they're served by different entities, communities, private, whatever, and having them awarded at same time so they can go out for common contracting, common o and m, so that somehow there are enough, it's enough of an area to make it scalable for vendors that are coming in to serve you. Because I'm really worried about the sustainability issue and also making it feasible for companies that will qualify under BEAD to be able to serve the area. Because you won't have, I mean, you're not going to do towns of 2000.
Christopher Mitchell (00:31:56):
No, but I think what I would expect to see based on Travis's ever presents question of who's going to go after this money is that it's almost entirely going to be ISPs that are already in the region who are extending. I mean to me, I think actually, I think way too much of this is effectively going to be a line extension program rather than a cohesive new network that will actually meet the needs of users.
Kim McKinley (00:32:22):
But this brings to my biggest point, and I mean maybe Travis will agree, but why are we giving private public money to private entities to help increase their valuation and what the shareholders want? If it is public money in there, why aren't we saying the state should own it and allow these providers to use it? I think it's a different conversation. That's just my belief of if it's public money than it should be a highway, not just like a one lane that one provider gets to use. Yeah,
Christopher Mitchell (00:32:55):
I agree with you. We lost the political fight.
Kim McKinley (00:32:57):
Yeah, I mean we lose a lot of political fights, Chris, US hippies, US hippies are everywhere.
Christopher Mitchell (00:33:04):
I took a shower today. Don't throw me in with that group. Kim. I'm sorry. Heather is who I meant to address this to. I think we're getting a sense, we don't want to spend too much time on the letter of credit because we have spoken about this at great length. It sounds like after the most recent salvo, the connect humanity or letters signed by over 300 entities, it seems like maybe N T I A is finally listening on this.
Heather Gold (00:33:34):
I am hopeful. I've heard from others the same thing, Chris. It's just being creative enough to think of the solutions rather than being fixated on this national bank. Let's tie up another 25% of money, which will be challenging for even large carriers. And it's sort of counterintuitive to getting new entrants in the market because who can afford to have fine 25% match while that may or may not be your money. So that's one thing, but then come up with this other 25%. It is very problematic when there are other solutions that can be used in the market. I do think there is some minor, I don't get the feeling that it's like B a, B, a where there's an absolute we're never going to move type of thing.
Christopher Mitchell (00:34:40):
What you're talking about, it's just to refresh people. Also, I think is that if you want lead grants, you have to put up 25% minimum. Perhaps more letter of credit is going to tie up another 20 to 25% of your capital to have that letter of credit and maintain
Heather Gold (00:34:56):
Of the amount of the grant.
Christopher Mitchell (00:34:58):
Of the amount of the grant. And then I'll just throw in again, you got 20% that if you're many kinds of cooperative structure or any kind of for-profit structure, 20% of the grant is going back to the federal government. So at this point we're talking about costs. That is even if you were hoping to get a 75% grant, you're looking at, well less than 50% in fact. And although there's nothing magic about 75%, there was a recognition. These are the highest cost areas and there's a significant level of support that is required and it's being nibbled away by unnecessary requirements and the failure of Congress to change the policy that taxes these awards. Travis looks like you're going to jump in.
Travis Carter (00:35:45):
I go back to my same old question. I'm still waiting. I'd like to meet somebody that's going after one of these things because when you do the math, I just don't see how they make it work. I really don't.
Heather Gold (00:35:57):
So Travis, do you think we're going to have money left over when it's all said and done because people aren't going to go after it?
Travis Carter (00:36:03):
No, I think so. The other thing I think you're going to find is, and I've said on this show, I think I was at a hundred percent last time, I'm going to go back to 99.8% of all the money. We'll go to the incumbent providers in the area and then we will be our once in a lifetime opportunity, I think is my friend Mr. Mitchell kept telling me back in the beginning, we'll effectively be squandered away and then we'll have a new once in a lifetime after this.
Christopher Mitchell (00:36:28):
I don't think I've often used that once in a lifetime. I might've once or twice, but I've been pretty opposed to that language. Have
Travis Carter (00:36:34):
You? Okay. All right. Well, I won't key that on you anymore, but no, I think it's kind of a sad state of affairs, quite frankly. And the other thing, and again, we talk about this rarely is I actually don't even think the people that really need help are even going to get help on this. And these are the inner city people that are really struggling versus the underserved million dollar mansions out on the lake that I was at two weeks ago. I feel bad for those folks.
Kim McKinley (00:37:00):
I guess my question is, Travis, would you put reserve a 25% of your capital for future bills into the bank to even get some of this money to build further? I don't think It doesn't really make sense.
Travis Carter (00:37:14):
There's no scenario I would ever go after this money, not in a million years with all these hooks in it. No way. And all these rules and the documentation, and then God forbid you get audited. Holy hell. Now you got to deal with that. What for? There's so much cash out in the private sector. Why in the world would be with
Christopher Mitchell (00:37:35):
This? Well, I mean, I do think there's a difference for a provider that's focused on a more rural area where no amount of private lending is going to get them to a business model that is going to connect those homes on the lake. So I mean, there's a little bit of a difference between your mindset and those. Heather
Travis Carter (00:37:51):
Is spot on. Spot on with what she said. These aren't going to be sustainable. So a real smart incumbent that doesn't get the money, just wait around a few years. You can pick it up for 10 cents on the dollar, let somebody else build it and then pick it up because they're just not going to be sustainable because it's
Heather Gold (00:38:09):
Always very scary.
Travis Carter (00:38:10):
It's expensive to have a staff and vehicles and
Christopher Mitchell (00:38:14):
Well, that's the thing. None of these, I don't think any of this money is going to go to entities that aren't already offering service. So it's not anyone who's coming. Now, it doesn't necessarily mean that they're going to be incumbent operator, but it's going to be entities that understand what they're getting into who might be an electric provider in the area or are charter spectrum or something like that.
Heather Gold (00:38:33):
But there are entities who are building rural now that would like to be involved in further rural build out that aren't necessarily neighboring, and they're going to have to do an analysis of how to make this sustainable.
Christopher Mitchell (00:38:47):
Yeah, I mean know Alan Fitzpatrick is watching, but I'm curious. Open Broadband operates in a bunch of different areas. Presumably they're looking around at different thoughts where they want to go after this. I'd be curious what they're thinking about it. So Alan, if you want to come on a future show and have a dual with Travis about why it makes sense to go after this money, or if you just want to have a pat on the back fest where you agree that you're not, I'd be curious because that's who I think Heather was just describing, an I s P like that.
Travis Carter (00:39:17):
Well, Heather, who do you think actually builds and operates the sustainable network off of all these dollars? Well,
Heather Gold (00:39:27):
I think the electric co-ops can build it, but I think they're going to be looking for owner operators to come in and run it for them. I think to me, that's the next big market opportunity or entities that instead of sitting there going, oh gee, I'll make so many millions when I sell this asset. Instead says, you know what? I'll go with the steady revenue and I'll come in and run a network and put together a consolidated o and m plan or a knock or call center and serve a whole bunch of smaller towns in an area. I mean maybe a whole Vermont c U D or p u d, so that it makes economic sense. The community still owns and controls its asset, which is what I think they really want at the end of the day. I don't think they want to do a telco. I don't think they want to run a telco network. Do you, Kim? I don't think most of 'em want to, but I think they do want to feel like they're controlling their destiny.
Kim McKinley (00:40:34):
I think that's exactly right.
Christopher Mitchell (00:40:36):
I think that's what we should want. And I think Heather, that's what we want to see. I do feel like I wish more agreed with what you're describing. Many of 'em, I think just don't want to do anything.
Kim McKinley (00:40:45):
I think that you're seeing them. I think, Chris, you're wrong there. I think a lot of them are seeing that they want to control their destiny. We saw just because they've been
Heather Gold (00:40:53):
Promised, saw that we were in Columbus and we heard it in Columbus where these towns in south, what part goes into Virginia? Southeast Appalachia. Yeah, Southeast. And they're tired of being screwed over by the man, and so they don't want to give up control of their assets anymore, but how can they keep control of the asset but not be on the hook to run a telco? I mean, that's hard work to run a telco.
Travis Carter (00:41:25):
Heather, how long do you think of an agreement the city would sign with a operator? Because see, that's the part we've always found so frustrating is the current administration. They're your champions. You put it in, you operate, you're working just fine. They run a bad campaign, get booted out, the new person comes in and now you're a pariah. No, I
Heather Gold (00:41:45):
Think you have to have 10 to 20 years. I mean, I think you have to be reasonable because remember, these people aren't getting the big bang at the end. You might if you decide to sell out. I mean, you've got to have some sort of economic justification for having somebody go with the steady revenue versus try to get the big bang at the end.
Christopher Mitchell (00:42:10):
This is one of the reasons why we've seen an effort to involve pension funds because they need that long-term steady revenue. And I feel like I was hoping that we would see more of that today than we have, but there's one source of private capital that would like that steady return.
Travis Carter (00:42:25):
Well, let's ask Kim. So Kim Electric co-op comes to you, city of 5,000 people or whatever, they're willing to build out the infrastructure. Well, I guess you're not an I S P, but in theory, would you
Kim McKinley (00:42:39):
Provide the ecosystem? We could provide the ecosystem, right?
Travis Carter (00:42:41):
Would you do it?
Kim McKinley (00:42:43):
I mean, I think it just all depends on the mean at the dollars and cents, right? I think it depends of, it goes back to what you said, the sustainability of it. Does it make sense for us to have a staff there to manage it? And what do they have that they can bring to the table that we could utilize? But it's always going to be a business case. It is not easy to make these pencil no matter where you are, even if you have the volume or you have the scale, it doesn't always make sense for even a UTOPIA or a Google or even some of the smallest and biggest companies to go into a city and operate it with 3000 people. And that's the crux of the situation that Chris says that most of this is going to go to people who already have infrastructure in those communities.
Travis Carter (00:43:29):
And the problem is, and at least as I see it, and I've said it many times and the data's a little old, but I still think it's prudent. It takes about 5,000 customers to actually run a correct proper network in an area. So it's real tough. If you've got a community of 3000 people, you're going to have to cut a lot of corners, which ultimately can you provide a quality enough service to actually compete? Then
Kim McKinley (00:43:56):
I do agree with Heather. I think if you have niche markets that somebody really targets some of these smaller areas and really brings them together and creates the scale to create a business case to run some of these, I think they work. But what I am seeing over and over again is there's a lot of people coming into this space right now who are promising, who think the dollars are there, even if it's from the pension funds who are investing into this, even if it's more just private straight equity coming into this, they don't know what they don't know. They all think the margins are higher than they really are in actuality.
Christopher Mitchell (00:44:32):
So I want to jump to, it's a related story, which is the Wall Street Journal had this article from Ryan Tracy who I think has done a good job before. I don't follow all of this stuff. I've long been felt that the New York Times had pretty bad telecom coverage. The Wall Street Journals had a number of people that are pretty good at it. This article, it talks about the high cost of some of these networks, and it's one of those things I just feel like people don't appreciate. Some of these networks cost a heck of a lot of money to get out to a home, but there's just not that many homes. And so the cost here that's highlighted is this cost of this $53,000 home to get out to. And it talks about the different programs. It kind of in the beginning of the article, mangled pushes 'em all together and then halfway down it actually separates 'em out to federal dollars per location served.
And there we see that the article's picking on the tribal broadband connectivity program, which is focused exclusively on tribal networks. And I get my backup a bit on that because federal governments took this land from people, made a bunch of promises that it never intended to keep and hasn't kept those promises. And now if it costs a little bit more or a lot more to connect those homes than it does to connect homes in other areas, so be it. It is actually not that expensive. We're talking about less than the entire tribal broadband connectivity program is $3 billion. So yeah, it costs a lot per location. In this case, they say 13,335 based on the program so far. That doesn't break my heart. If you look at the U S D A reconnect, that's $9,000 per location. Those are very small areas. I'll get you in a second. All of you. The Capital Projects Fund is a very reasonable $3,000. When we look at the awards from many of the states who are still using the capital projects fund that the Biden administration distributed, that's often coming in between two and $3,000 per location served. Most of these costs are pretty reasonable. So anyway, that's the background, and I'm a little bit worked up about it, but I'll let Travis talk me off the ledge.
Kim McKinley (00:46:48):
Are you a little emotional about this? Are you a little emotional about this? Christopher?
Heather Gold (00:46:53):
I think the guy skewed the data to make a point that he wanted made. Rather than looking at the whole universe of what we're going to spend per premise, they called out the extremes, and that's like a $10,000 toilet lid for the military. I mean, what is the day in day out cost of most connections? And I just think that was inappropriate. It was so typical of the way they overregulate welfare mothers versus millionaires. I'm with you. It gets a little bit annoying because most places are not going to cost $53,000. And you have a point, Chris, that we made all these promises and then they never got anything else out of it.
Christopher Mitchell (00:47:49):
Yeah. Travis, you raised your hand.
Travis Carter (00:47:52):
Well, I was trying to get you to talk to Kim because she had a good point. I
Kim McKinley (00:47:57):
Did have a good point. I want to make the point of, we keep talking about this tribal in 53,000 per premise, but what matters most to Travis's point, we have a lot of inner city and urban areas who don't have connectivity that are a lot. There will be cheaper costs to get to. So I think it's both
Christopher Mitchell (00:48:16):
In those areas. You're talking about like 150, 200 bucks per premise,
Kim McKinley (00:48:19):
But they're still not getting to those either. So you have these 53 and you have the cheaper. So I think we need to bookend that both of these matter, and we're only talking about one, and we keep going down this path of only rural and these high costs, but I think it's a conversation of both that are being missed.
Christopher Mitchell (00:48:36):
I agree. We need to do both. I always get nervous when as Travis notes, some of this money in the rural areas is going to the millionaires and it's their third home. And I hate that, and I wish there was some easy way that we could separate that from the retired couple that's actually living on the lake, and that's their first home and they worked their whole life to be there. And we shouldn't be like, oh, you don't get Internet access because you happen to live near a millionaire. Right? That's no way to do it. But I get nervous when we start using that as a justification. Then there are people out there who will say, oh, it costs too much in rural areas, and the people that live in the cities aren't deserving. We shouldn't spend any of this money. And in reality, we are losing money right now in all of the homes who are not connected.
The amount, it doesn't always come out, obviously. It's not that there's an obvious check necessarily, but kids that don't have educational opportunities, whether they're in the city or whether they're in a rural area, they are going to cost more money for all of us moving forward for social services, crime, statistics, lost productivity, however you want to look at it. And so we are losing money right now in healthcare. We're paying for Medicare, Medicaid, and a variety of other programs where we are overpaying for services because nobody can count on using telehealth at home. That whole market of telehealth is not developed the way it should because there's no expectation that most people have a connection that could actually support it. So there's all these ways in which we are losing money right now by not solving this problem. And it just drives me nuts when we focus instead on the fact that there's one home, there's $53,000, and you know what? That home, probably most of that cost is the fact that the tribe lives 20 miles away from something and they have to build this connection through federal land or something like that, and it's very high costs.
That's a lot of things. It's a lot of things.
Kim McKinley (00:50:31):
I just want to let you know that Doug is not here, and we got a rant. We just got a rant. We're really excited about that.
Heather Gold (00:50:37):
But I think, Chris, you're making a good point that, I mean, my whole thing when I saw this was they're focused on the wrong thing. I mean, they took a random data point to make a point that was not conclusive.
Kim McKinley (00:50:55):
They do that every day. Heather, I mean, let's
Heather Gold (00:50:57):
Be honest, that's what the news is. I mean, the fact that I read the Wall Street Journal that day was only because someone called it to my attention.
Christopher Mitchell (00:51:09):
Not all of us agree with all the comments, but I just wanted to share. There's a lot of, I think sentiment out there that there are ways of dealing with this, and billions of dollars is real money, but at the same time, the missing out on years of opportunity and making sure that people have fulfilling lives, the point of the federal government is supposed to be resolving a lot of these kinds of issues and should be doing a better job of it. Travis, anything you want to say on this before we move on?
Travis Carter (00:51:39):
I actually, I'm disappointed in myself because when we started out this whole BEAD program, I had high hopes. I mean, I was only in the 92% going.
Kim McKinley (00:51:48):
I was like, what are your high hopes, Travis?
Travis Carter (00:51:51):
Now it's virtually a hundred. If I had to do it over again, I would've put more support behind the wisps. Actually, I think they could have done a lot of smaller businesses, family owned businesses could have done some good work out in these extremely rural areas.
Christopher Mitchell (00:52:05):
And I agree with you, Travis. Lemme just ask you about this though, because there again, it's not perfect. There's a bunch of wisps and some of these folks, they're just going to do the bare minimum. There's a bunch of wiss that are going to do far more. They're going to do a great job, but there's a fair amount of these, and some of the ones that Wall Street is consolidating are in private equity. They're going to do the bare minimum. And so even if we had gone down that path, we'd also be talking about the waste and missed opportunities, I think.
Travis Carter (00:52:32):
Yeah, no, with you. And the second thing I, it's, I think there needs to be more than just the incumbents because the question I have, because I'm not a subscriber to the Wall Street Journal, so I can't read the article, is it's behind a paywall.
Christopher Mitchell (00:52:45):
You're a small business owner, you get it for free.
Heather Gold (00:52:48):
Christopher Mitchell (00:52:49):
Travis Carter (00:52:49):
We don't get anything for free. So the question always becomes of this $53,000, what did it actually really cost? Was it $8,000? But by the time all the bureaucracy and all the layers of management and all the permitting fees, who knows how much? Did he break it down? No,
Christopher Mitchell (00:53:13):
They have not broken it down, but I would guess
Travis Carter (00:53:15):
Interesting to see, because I think everyone's going to leave this conversation thinking it was $53,000 worth of construction to get that to happen. I will guarantee you the construction was probably 20% of that, and the bureaucracy was the rest of it. So I would love to dig more into that if we can. I think it leaves people with a misguided perception that what are the real costs to build these networks versus what the costs are? By the time you add all these expenses and all these engineering studies and feasibility studies and all the other jazz Environmental
Christopher Mitchell (00:53:47):
Travis Carter (00:53:48):
Yeah, yeah. Permitting, et cetera, Kim.
Kim McKinley (00:53:51):
Okay, I have a question. We keep talking about they are hitting these areas, but the incumbents are only going to take the money, or the wisp should take the money and there's bad wisp and there's good, all these people are good and bad. What if we started measuring customer experience from these customers and what quality means from the customer side when we're allocating some of this money, and how do we measure that? Because if the customer experience is good in some of these role telecoms, I think they deserve the money. But yes, I agree with you, Chris. There's a lot of crappy rural telcos who are doing the bare minimum and they're a monopoly, so they have no desire to change anything. Why don't we change? I mean, I know we've done all these latency and everything, other requirements, but why don't we look at the customer experience and reviews and what the customers are actually experienced before we allocate the money? Or is that just too hard?
Christopher Mitchell (00:54:42):
I think it is hard, and I don't know if there's a precedent. Go ahead, Travis. Remember
Travis Carter (00:54:46):
We talked about that, where remember we just picked, we said, all right, let's take everybody's Google Star rating, and if you have a four plus rating, your barrier of entries almost zero. If you have between a one and a two, we're going to burdensome you like crazy. We want to make sure our money's well spent. Remember, we kind of had that idea in the
Christopher Mitchell (00:55:05):
Yeah, no, I like idea
Travis Carter (00:55:09):
Who's going to police it.
Christopher Mitchell (00:55:11):
That's it. And that's where it comes down to someone. If you use that as a Google ranking, for example, you've created a market for someone to spoof Google rankings, right? Unfortunately, how it comes about,
Travis Carter (00:55:22):
Remember we also said, should the first 10 million that somebody gets in funds be unencumbered, meaning there should be no letter of credit for it, and allow some of these smaller players to get a foundation to Heather's point where they can get some traction to start building some revenue to continue to feed the network. We talked about those ideas as well, but I don't know. None of these programs ever seem to hit the small well run operators. They always hit the Wall Street operators.
Christopher Mitchell (00:55:52):
I mean, if you look at Travis, you and I have talked before about I feel like some of the waste fraud that came out of the pandemic programs, the ones to the small businesses were supposed to tap into if they didn't lay off their workers and stuff like that, right? Yeah. I think it's worth noting those were programs that I think, like you said, were just aimed to try to be like, alright, let's just try to get this money out to people that are doing work. And the problem is it's amazing how fast the scammers come out and how bad the legal system is at dealing with them.
Travis Carter (00:56:27):
But I have warmed up your idea or your statement a little bit where you said, well, if there's only 20% waste, it's probably a successful program. I thought you were insane having that conversation in the beginning in episode two, but by now you're kind of right. You're like, damn, if we can just get a lot of the money working well, it's better than in a lot of cases what's happening right now.
Christopher Mitchell (00:56:53):
Yeah. And Heather, I think you got something that you want to jump in. I just want to say a couple of times I've wanted to say this. I think there's an assumption that we are worse off now. Our government programs are worse now than they used to be. There's always been this issue, and I think we're doing about average. We might be doing worse in some areas and we're doing better in some other areas, but I don't think it's the case that the current government is particularly worse at this sort of thing. This is a perennial problem. Go ahead, Heather.
Heather Gold (00:57:21):
Well, I was going to say 20. I'd be happy if we got 50% to the people that really need it.
Travis Carter (00:57:28):
Let's also not forget that we haven't even mentioned the biggest problem that's going to encumber these networks from being built. The current interest rate on the debt market is just, I mean, in the last year. I mean, it is just, it's insane.
Heather Gold (00:57:46):
Everything. Yeah, it's debt, it's labor rates, it's everything. It's got a really slow roll. This whole system,
Travis Carter (00:57:58):
95% of people I speak to in the industry are really pulling back their build sizes now. I mean, we're talking significantly 25,
Christopher Mitchell (00:58:08):
And we know that from the publicly traded companies too that they're doing that. So we're going to talk about Commissioner Anna Gomez before we go, and then customer service. But a very quick question that Ruben had suggested was he wanted to see our pets and to know what candy we like. So my pet is not handy, my two beagles, but nice Kim.
Heather Gold (00:58:31):
I like her being him or her
Travis Carter (00:58:34):
Ready. Ruth Gator. Kat Berg or something. Her name
Kim McKinley (00:58:36):
Is Ruth Bader Katz. Berg. That's
Travis Carter (00:58:39):
Kim McKinley (00:58:40):
She has one tooth. She was named your own price at the shelter.
Christopher Mitchell (00:58:47):
Heather, did you bring any pets with you to your hotel room?
Heather Gold (00:58:50):
No, but I don't have my own pet yet. I hope to get one in the next year or so, but I have What
Kim McKinley (00:58:57):
Kind of pet is Heather Gold giving
Heather Gold (00:58:59):
A dog? I have grand dogs. Well, I have one grand dog that passed away, unfortunately. But now I have my other grand dog, Enzo, who is a 15 year old rescue. She's a sweetie pie and she's actually going to be, we're going to be, well my husband, not me, because I'm never home, but he will be babysitting Enzo over the next two weeks, and I think he's really excited about it. So yes, we love dogs. And so I'm anxious to have a dog myself.
Travis Carter (00:59:33):
I like how Heather's signing her husband up for a dog. She's never home. So we're going to get a dog. Get a puppy. No,
Heather Gold (00:59:39):
My daughter is also going to be traveling and she asked my husband if he would dog sit, and he said, of course, because Enzy iss so old, we don't want to leave her with somebody who doesn't know her. Yeah. So Candy, oh,
Christopher Mitchell (00:59:56):
Let's, let's just the pets for a second. So I have two beagles. Connor and Mie both adopted and they're getting quite older and trying to, my son is suddenly really infatuated with dachshunds, and the only reason that I want to support him and potentially getting a dachshund is because of all the naming opportunities. Docs. Something is going to be great. It's a must have,
Heather Gold (01:00:19):
But you have to be so careful. They have a lot of back problems and they like company. I
Christopher Mitchell (01:00:28):
Had a in high school, a friend of mine and his family had three or four of 'em, and they were great romping around together. And yeah, the back problem is common.
Travis Carter (01:00:35):
So you're going to name your dog dus after.
Christopher Mitchell (01:00:39):
Oh, I love it. Oh,
Kim McKinley (01:00:41):
I feel sorry for this puppy whenever it comes to fruition.
Christopher Mitchell (01:00:46):
Especially if we had two dogs and they were sisters. One of them has to be dus. Absolutely. Doc bro. And
Heather Gold (01:00:52):
D. Oh, I like that. I like that.
Christopher Mitchell (01:00:58):
Kim McKinley (01:00:59):
I'll give you the pleasant smile. That's a great idea.
Travis Carter (01:01:02):
Oh, pets. Pets. I've got my fish tank. I've got a 1200 gallon fish tank. I love it. That's my hobby. And then of course, all south kids that grew up on the south side of Minneapolis, I got a pit bull. So she's the best. Wow.
Christopher Mitchell (01:01:17):
He's the best.
Kim McKinley (01:01:19):
What's her name?
Travis Carter (01:01:20):
Kim McKinley (01:01:21):
I've had two pits in my life. They're the best dogs. I love them.
Travis Carter (01:01:25):
They're absolutely the best. So she's 14, so we're kind of deep in the fourth quarter. So when that time comes, I will probably not be participating for what, two to three years? Is that how long you mourn the dog?
Christopher Mitchell (01:01:42):
We'll, say a favor, candy for later. Anna Gomez has been confirmed. Big news, as we said, it's one prediction that I've gotten correct. I'll take it. That she would be rapidly confirmed because she has corporate experience and has a much less ambition than Gigi so did to actually serve the people that need a lot of help in the United States. So of course she got through it without any econ firm, without any sort of campaign against her. Any expectations or thoughts on what the F C C will do now? That is a full compliment of three V two.
Kim McKinley (01:02:18):
Nothing will change.
Christopher Mitchell (01:02:22):
Nothing would be an improvement over bad.
Kim McKinley (01:02:25):
So do you really think, Chris, that anything will change?
Christopher Mitchell (01:02:31):
I do think some things will change. Yeah. I think some of the folks are trying to be strategic. I mean, I think everyone's recognized that the F C C is poorly run as a shadow of what it should be. And I think some people, rather than just saying, let's get more authority to the F CCC, are trying to be more strategic, and how the F C C could get some stuff in that, even if it itself wasn't policing, might allow others to be effective through data collection or things like that. I don't know. So have hope. I have to have hope so I do.
Travis Carter (01:03:05):
What would we even want? Do we feel like we've been missing out on something?
Heather Gold (01:03:10):
Well, a hundred over a hundred would be great.
Kim McKinley (01:03:13):
One gig. Heather, let's go bigger. Let's go one gate symmetrical.
Christopher Mitchell (01:03:17):
So you're talking about the definition of broadband?
Heather Gold (01:03:19):
Yeah, I mean, come on, let's just start and be realistic. Don't use the seven, oh, whatever is it 7 0 4 Report to pat yourself on the back when nothing, 4 7 7. Thank you. No, that's the
Christopher Mitchell (01:03:34):
7 0 6 report uses this. Thank
Heather Gold (01:03:37):
You. The 7 0 6 report should not be used to pat yourself on the back when nothing's improved.
Christopher Mitchell (01:03:43):
Right? I mean, Travis, in response to your question, what would we really want? Realistically, I would say a process to have a real data collection's still something that should be done. The F C C. Yeah,
Heather Gold (01:03:56):
You're right, Chris. They could do non-disclosure so they can get the real information.
Christopher Mitchell (01:04:03):
Then they could just say, you know what? We had to act quickly. We acted quickly. Now we are going to engage in this other process, and in three years we will have data that will be accurate and actionable. I don't think they're going to do that. I don't think there's even a chance of it, but they could.
Travis Carter (01:04:18):
So to Heather's point, so we get better data to continue to propagate 25 by three.
Christopher Mitchell (01:04:25):
Well, no, 25 by three is pretty much out the window. It's going to be 120. That's going to be the new broadband definition shortly. I'm not going to bet wings on it, but I believe that strongly
Travis Carter (01:04:36):
We better not overshoot. Huh? Okay. Oh, for three. Well,
Christopher Mitchell (01:04:42):
We'll get past the 120 as soon as Comcast and Charter have rolled out. DOCSIS for the definition of broadband is set by what the cable lobbyists will accept. That's
Travis Carter (01:04:52):
Work. I think it's the wireless lobbyists that are setting it.
Christopher Mitchell (01:04:56):
Nobody listens to the wireless lobbyists, I don't think. Sure.
Travis Carter (01:04:58):
Okay. Alright. Fishy to me.
Kim McKinley (01:05:01):
Do you think that the F C C is embarrassed because N T I A is getting a lot more credibility and recognition for all they've done and the f C has kind of been on their coattails a little bit during this whole process, or do you not
Christopher Mitchell (01:05:15):
Agree with that? I think they should be embarrassed, but I don't think they are. Heather, have you been to any impression that they recognize how bad they're doing?
Heather Gold (01:05:21):
So I haven't been in interaction with the F C C in a long time, so I don't want to say one way or the other, but to me it sounds like it's not on the current administration. It wasn't on their watch that the dissatisfaction with the F C C came up. So I certainly wouldn't want to point blame. I mean, I think
Christopher Mitchell (01:05:46):
Heather Gold (01:05:47):
Was such a disaster that
Christopher Mitchell (01:05:49):
Adolf was bad, but if I had spent my career talking about the homework gap and being so proud that I invented that term, I think I might've done a lot more to try to deal with that over my term.
Heather Gold (01:05:59):
But I know there wasn't until she had five commissioners, she really didn't have, they weren't going to be able to do anything. So maybe I just
Christopher Mitchell (01:06:09):
Imagine this is political leadership. Oh no, everything didn't go my way. Well, welcome to being in a position of power. That's what happened.
Heather Gold (01:06:18):
I know, but look at what's going on down the street there.
Kim McKinley (01:06:23):
So to your question, is Rose and morsel to blame for any of this that has happened? Or is this just something that's been going on for years that we're just continuing down this
Heather Gold (01:06:35):
Pathway? I wouldn't want to blame her for anything. I mean, I think there was just a perception after R D O F that didn't work. And if we're going to give all this money to rural broadband, we had to try something new.
Christopher Mitchell (01:06:50):
And I do want to note for people who I think are watching this show and don't always know all of these people involved and whatnot, Kim Travis and I have almost zero expertise on the F C C, what's really going on inside that room and things like that. Heather has more, but even so, Heather's not one of the criminologist types that are spending a lot
Heather Gold (01:07:10):
Time on that. My information is dated. I'm more involved in the business aspects of broadband deployment today and less in wrangling over regulatory niceties.
Christopher Mitchell (01:07:21):
But I mean, to just give you a sense, I mean the F C C is about to give out tens, or sorry, F C C data is going to be used in how to give out tens of billions of dollars and millions of homes are not eligible. Maybe hundreds of thousands of homes, maybe more than 1 million. I don't know exactly what the range is, but a significant number of homes are not eligible because wireless companies, the big wireless companies in particular have said we can serve anyone in this radius. We talked about this on previous shows. I've talked about it on community broadband Bits podcast. They say there's a big circle and we could serve any home within here with a high quality service. And the F C C hasn't bothered to say, well, can you serve every home? To which the answer is no. And the wireless companies would probably even be honest about it, but the F C C hasn't even bothered to answer the question or ask the question. And so I look at this stuff and I just think it's not serious. And you can point to the previous administration and you can point to the Obama administrations who also failed to get a lot of needed things done. But the simple fact is the FCC is not getting the job done and it's really embarrassing right now.
Travis Carter (01:08:27):
Well, it leads me to my question then. What would we want them to do? Is it basically better data? Is that what we really need out of them? I
Christopher Mitchell (01:08:34):
Think of bedrock. I mean, you look at what do government agencies do? And in my opinion, you look at NOAA and they do a ton of things that are important, but one of the things that they do is they provide the baseline data that entire industries depend upon to know what the weather is going to do. I mean, people don't appreciate this. When you ask, what does government do? Well, if you have a forecast app that you use or you want to know why we don't have massive die-offs of crops in different areas, it's often because of government data that is accurate and allows industry to plan and do things. And it is just embarrassing the level of data we have on this industry, which is a key input for nearly all of our economy at this point.
Travis Carter (01:09:13):
Let me ask you this. So we're now the F C C commissioners, Mitchell, you can be the leader and Heather, Kim and I, we sit on the little board or whatever. How are we going to do that? A lot of that data is guarded by all the ISPs. How are we going to get them to realistically dump realistic data?
Christopher Mitchell (01:09:40):
So let me just throw out one idea, and I think it's a very good question you're asking Travis. I'm curious what Kim and Heather have to say. My first is I don't think these companies are as worried about the data as they claim or other people are afraid of fundamentally their competitors know this data. And so where do they serve today? At what speeds? And there's a penalty if they significantly overstate their coverage at that point. I think we have much better data. It's not perfect, but it's much more in that direction.
Kim McKinley (01:10:07):
I think it's really complicated, and I don't think these ISPs are really trying to always be so deceitful. Just for an example, inside of Team UTOPIA yesterday, we have a term called orderable, and then we have a term called available. Well, orderable means that they can sign up today. Available means they might have to do a small little, maybe a block build. And so it's very convoluted of what do they want and how do they want the data to be? And because some of these ISPs might not be really trying to hide anything, their data from years of doing this might not be to the best quality that it should be.
Christopher Mitchell (01:10:47):
So this is where Travis's question of realistically what can be done. To be clear, one of the reason the F C C doesn't ask better questions is because if they want to change a form, they have to go through a hellacious multi-agency process to get that approved. And this is one of the things that a recent book, I think it's called Recode America or ODing America by Jennifer Polka, wonderful book. I think I plugged it before she talks about this. And so there is a realistic penalty that it's not just a matter of being like, oh, we're going to ask some new questions. It would be painful, but I think it's important enough to try to do that sort of a thing. Heather, go ahead.
Heather Gold (01:11:25):
No, I don't disagree with you. I don't know if the institutional will, is there? Is that what you're trying to say?
Travis Carter (01:11:33):
Well, I don't know. It's always easy to be, what do they call it, an armchair quarterback. And we can sit here and go, they're not doing this. They're not doing that. But I like to put myself in the position of saying, okay, they magically put us in charge. What are we going to do to make it a better situation? And I don't know, I think it would be a very challenging situation. I think that the F C C, right or wrong, relying on the states is probably the right answer. The states know better than the feds do what's going on in each individual area,
Heather Gold (01:12:02):
Push that. And a lot of states are, yeah. And a lot of states are doing that. They're doing their own mapping and
Christopher Mitchell (01:12:07):
They're flexing their muscles. Now, some aren't doing great, but they will get better at it. It wasn't the fccs decision, by the way. It was Congress's decision to take it away from the F C C because the F C C was doing so poorly. But Travis, I do think you asked the good question, what would I do if I was there? But let's also remind ourselves the F C C, it's not a matter of, the proper question would be what if we had 10 years of training of understanding how this stuff worked and then we were in that position? The people that go to the F C C are not random people who are plucked out of nowhere. And so it is a little bit harder to answer because anyone who's at the commission would have spent years preparing for it.
Kim McKinley (01:12:47):
But I think
Travis Carter (01:12:48):
I understand that. But if we stood in front of the f c and said, if they called us all in, they said, Hey, we saw your episode 80. Come to Washington and talk to us, hell, I wouldn't know what I would want from 'em
Kim McKinley (01:12:59):
Better. But I think we need standardization first guys. I think we need standardization with the ISPs of what we are expecting them and of them and how are they supposed to report things because we don't even have that today necessarily of this is how you should categorize stuff. It's a mixture of how every I S P is supposed to categorize it on this granular side and then we put it, then they're supposed to translate that into what the F C C wants. So I think we have to go back to very much a reporting and what we want to see of how these ISPs should categorize what
Heather Gold (01:13:34):
Everything looks, what the day that we really want.
Kim McKinley (01:13:36):
But even no, going back to my previous thing of what does this look like? How do you categorize a house that has a device in it? What do you categorize a house that has the connection in front of it? You need to go back and add standardization to those aspects in order to get the reporting upstream to look better. Because I think that is a fundamental problem.
Christopher Mitchell (01:14:00):
And I do think, Travis, I would do, if we were in that scenario that you laid out, what I think you do when you are in that scenario is I would call other people and be like, Hey, what should I tell them? And I would start getting a better sense from different people in the field. Because
Travis Carter (01:14:15):
I mean, if I was in front of the F C C, here's what I would want. I'd like more wifi spectrum. If they could open up the six gigahertz channel, the whole thing for us to use this would be an amazing thing to happen.
Christopher Mitchell (01:14:29):
And that would be a concrete ask. And that's something that I do think I would be pushing if the
Travis Carter (01:14:34):
FCC that happened the last F C C did it.
Christopher Mitchell (01:14:37):
Well, I wasn't sure if you were meaning that there was more to open up on top of that.
Travis Carter (01:14:41):
I left that softball out there for you to hit to talk about the greatest F C C commission of all. No,
Christopher Mitchell (01:14:46):
No, that's my point is that that's one of the things that we would do is that we would look for the opportunities to maximize spectrum. For instance,
Kim McKinley (01:14:56):
He's not letting you take him down. He's not letting you take him down today.
Christopher Mitchell (01:15:00):
I just feel like anyone who's watched this
Travis Carter (01:15:01):
Show, he's in the rank mindset.
Christopher Mitchell (01:15:04):
I mean, many of our current problems can be traced back to the chair who didn't take his job very seriously except for pretending that he cared about rural areas. He did several good things. He initiated the window for a tribal priority for spectrum. It's huge. And I think there's several things that if I had a chance to meet api, I'd probably thank him for those things and I would probably not dwell on the many other things where he screwed us.
Travis Carter (01:15:36):
We often talk about this, but sometimes I wonder if we also forget what's going on right now. There's four of us plus however many people all over the country slash world that are communicating through this medium that didn't exist when I was a kid. So I mean, there's a lot of positive has happened too. Let's not forget about this over the years. Yeah,
Christopher Mitchell (01:15:56):
No, I've no doubt about that.
Travis Carter (01:15:58):
I don't want to get in that habit of just constantly moaning and complaining.
Kim McKinley (01:16:02):
I think that's a good point. I think we do need a compliment of how much has been put in the ground and how much is getting accomplished every single day. I think sometimes we do focus on what hasn't been done. But I like your positivity over there, Travis, what's happened to you
Heather Gold (01:16:18):
If you look at the percentage of unserved and how that is falling regardless of what we're doing. I think you're right, Kim and Travis. I do think we need to focus more on what is happening and not just at the federal level, but a lot of it's driven by states and communities realizing they needed to make changes and not just to collect more franchise fees.
Christopher Mitchell (01:16:43):
Yeah. I also will just say, and we'll have to wrap here, that if we were able to solve all of the problems, then we would leave our children with a terrible burden of not having anything interesting to do
Heather Gold (01:16:56):
Anything. They're going to be worried about something to do. Right.
Christopher Mitchell (01:17:01):
Solving problems is something that I think is more satisfaction comes from that than anything. I love playing a video game, but solving a problem is something that just makes your day.
Travis Carter (01:17:11):
Toronto radios for everyone. There you go. Yeah.
Kim McKinley (01:17:15):
And I don't think my cat really is concerned about having a problem to focus on when I pass. But thank you Chris.
Travis Carter (01:17:23):
I do think, I just hope it'd be cool if they invited us to the FCC to talk to. That'd be neat. I might actually put on a tie for that. No, I won't. With the
Kim McKinley (01:17:31):
Black shirt, black t-shirt and just a tie on top of
Travis Carter (01:17:34):
It. I might put my coat on if they and say, alright, you smart blanks, what would you do? And then we can watch Mitchell really go,
Christopher Mitchell (01:17:47):
I would feel a lot of stress, I'll tell you that right now. Because I would take it seriously in ways that would really, it would very be a difficult time. So I'm glad I'm not going to have that opportunity. Oh good.
Travis Carter (01:17:58):
I wouldn't take it seriously so we could be bookends of the whole event.
Christopher Mitchell (01:18:03):
Well, I want to thank Heather. Thank you for joining us.
Heather Gold (01:18:07):
It was fun as always.
Christopher Mitchell (01:18:10):
Thank you Travis and Kim, thank you Ry for producing. Wonderful to have you back. And thank you Ruben, for jumping in so much. Juan, we're sorry for your loss. It's so hard to have a pet pass. So that would be a problem that we should ask the F C C to solve immortal pets. And we will be back, I think in two weeks, I want to say likely. So we'll circulate a time and see if we can get on back on the horse. But until then, it's been a wonderful episode of Connect This.