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Setting the Bar High in Colorado: Longmont's NextLight - Community Broadband Bits Podcast 392
NextLight, the municipal Fiber-to-the-Home (FTTH) network in Longmont, Colorado, has been serving residents and businesses in the community since 2014 and offers reliable gigabit connectivity at affordable rates. This week, Director of NextLight, Valerie Dodd, is on the show to discuss the past, present, and future of NextLight with Christopher.
NextLight has implemented some special marketing and customer service techniques, which has helped achieve the high take rate that continues to grow. As the network expands to all areas of the city, Longmont has used some creative approaches and contended with a few challenges to connect residents and businesses. Valerie and Christopher talk about some of these decisions and how those choices have panned out.
They also discuss the community's commitment to digital inclusion and how it's paying off in an increasingly diverse and growing city. Valerie describes how her experience with a private sector provider has contributed to NextLight's focus on subscribers and breaks down some of the key differences between a traditional municipal utility, such as an electric service, and broadband service from the city.
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Valerie Dodd: Really it was rolled out to serve the community. You ask the community and they're just delighted.
Lisa Gonzalez: Welcome to Episode 392 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. Longmont, Colorado's NextLight Fiber-to-the-Home network has often been in the spotlight as an example of what a local community can accomplish with publicly owned Internet network infrastructure. This week, director Valerie Dodd visits with Christopher. Christopher and Valerie look back at the decisions the city made that have paid off and how they've dealt with specific challenges. They discuss accomplishments including an incredible take rate and how putting subscribers first has helped them achieve glowing reviews. They also talk about the city's digital inclusion efforts and what's next in expanding access. Now here's Christopher talking with Valerie Dodd from NextLight in Longmont, Colorado.
Christopher Mitchell: Welcome to another episode of the Community Broadband Bits Podcast. I'm Chris Mitchell for the Institute for Local Self-Reliance in St Paul recording from home today where I just have to brag about this. We're about to get six to 10 inches of snow and I am just so excited, and I'm talking to someone who knows that same feeling, Valerie Dodd, the director of NextLight in Longmont, Colorado. Welcome to the show.
Valerie Dodd: Thank you so much, Chris. I'm super happy to be here. Are you suggesting that we may be getting six inches of snow tonight?
Christopher Mitchell: No, but in the time between I'm recording this and the time in which it airs, it's possible that you'll get a foot of snow. You never know what's going to happen.
Valerie Dodd: Well I sure hope so, because I've got a three-day weekend and the snow mountains near me and I'm excited about it.
Christopher Mitchell: Let's start off by just for people who aren't that familiar with Longmont, incredibly fast growing city, just fascinating place, but can you give us the 30-second sketch of what Longmont is?
Valerie Dodd: Longmont's a community in the foothills front range area of northern north central Colorado. We have a wonderful view of the mountains just to the west. We've got a population of around 100,000. It's a very progressive town and it's also a very diverse city. You mentioned it was fast growing and I think that's a result of a lot of the decisions that our city leaders in the community have made, and one of those being the establishment of a gigabit fiber network.
Christopher Mitchell: Right, and that fiber network first started being discussed in 2009 with a referendum, but really kicked off a lot of other things in both the front range and in Colorado more generally. The first city-wide fiber network in the state from a municipality, but you just had some hard news and I hope you're taking it okay in terms of I think over the summer you went from being the fastest in the nation to the third in the nation by PC Magazine, so I hope you didn't take that too hard.
Valerie Dodd: We can live with that. Providing a gigabit Internet service to every eligible household in the community is a pretty big deal, so I think we're okay.
Christopher Mitchell: And you yourself are probably settled in now, but you're new to the position. Can you just tell us a little bit about your background?
Valerie Dodd: I started with the city of Longmont back in August of this year. I previously had been at CenturyLink for about 18 years. Prior to that I had worked for a startup sealant company and I had also worked for Alltel Wireless Communication, which then sold their wireless off to Verizon and the wireline part of the business became Windstream. So I've been in the business 25+ years and rolled out and was responsible for one of the first broadband Internet product offerings back when we were charging about $50 for 256k, so things have changed dramatically. So now we're doing a $69 offer for a gigabit, so I've seen a ton of change over the years but at the end of the day, the right thing to do is just to take good care of your customers.
Christopher Mitchell: I was curious as someone who's spent a long time at CenturyLink, CenturyLink is now a competitor of yours. Was it hard to make that jump?
Valerie Dodd: I wouldn't say it was hard. I gained a tremendous amount of experience in the previous roles that I served there, but there is a huge difference. For one, I have a tremendous network and product I get to sell. While I was at the other provider, I hate not to mention it too often, we did not have the fortune of a 100% fiber network. We were just starting to put fiber into new greenfield territories because you really couldn't afford to overbuild a copper network, so for one, did not have the benefit of the delightful gigabit speeds that we have here. Secondly, in this environment, it's really about the community. It's not about the bottom line, and so from those two aspects, it's a wonderful place to be and it's really something I take a lot of pride in is that we're able to provide exceptional service and make it available to every neighborhood, every block, and every customer because that's what we're here to do. We're not here to make money. We're here to provide an exceptional service for our community.
Christopher Mitchell: I think it's worth noting you're in good company, because many of the municipal networks have people on staff and are headed by, in many cases, people that have that sort of experience of having worked for other large companies and have a deep history in telecom. But let's talk about Longmont like you were pivoting back to. You have more than 20,000 customers connected in the article that announced your arrival, and so I just think it's tremendous. I mean, to be at a place in which you have more than half of the community connected in this period of time is just remarkable, and so I'm curious if you want to give us the most recent information you can about how many connections you have and any reflections on how remarkable that is.
Valerie Dodd: Yeah, it's very remarkable, and I'm so proud and lucky to walk into this position with such success. We're now up to about 20,600 customers. We're growing everyday. We hope to have about 22,000 by the end of the year, so that's something we're super proud of. Everyday we continue to enable more households. We're still not 100% finished with our initial build, but in five years we're able to pass and establish fiber access to about 80-85% of the premises out there, so we think we'll probably be finished here in the next year or so with a few thousand more turnups, so real proud of the work that we've done, the success that we've had considering that we have two other formidable competitors in the marketplace.
Valerie Dodd: The fact that we're pushing 60% penetration is remarkable, and if you back out those households that don't have that home Internet, which I'm hoping to address at some point, but if you back those out of the equation, then our penetration, really effective market share and penetration is closer to 65-70%, so that tells you how well received the service offering is. It speaks to our extreme reliability, which really hovers between five 9s and a 100% network reliability, and then our customers continue to do speed tests and be overwhelmed with the fact they're actually getting what they signed up for.
Christopher Mitchell: Well let's talk briefly about the charter membership, because one of the stats that I saw in reviewing your remarkable achievements, I think I've just said "remarkable" a remarkable number of times, but is that more than 90% of your subscribers have the charter membership, which to me, I'm stunned we haven't seen more municipal networks or even small ISPs adopt this approach. Would you mind just walking us through it and then your reflections on it?
Valerie Dodd: Honestly, I'm not sure if it's still around 90% or not, but it probably is close to that. But Longmont does have the benefit of a growing community, so as we have more people moving into the community, we'll have more first time customers that are moving into an established resident or a new MDU so they may not be getting that new discounted rate, so if that 90% drops it's probably because just the community is growing.
Christopher Mitchell: Right. The charter membership, I saw it as kind of a marketing deal. Brilliant, which was that if you sign up for the service within the first three months it's available, then you have this lifetime low price, and what that did was it changed the incentive for many people. When a new provider comes to town, they'll take the incumbent's lower price and a contract for a year or two, and that's just really harmful for any new network and so you really flipped the tables on that and brought so many new people online right away.
Valerie Dodd: Yeah, absolutely. It's a very sticky offer and you keep that price, even if you do relocate your address so you get to keep that price and if you were to disconnect service, you wouldn't be able to come back and get that price. So it was a very tactical, strategic marketing price point for us, and then the other thing it did is it created a huge wave of really satisfied customers in a given geographic area, and so as soon as they get their service at this amazing speed, you're darn right they told every customer on the block, and I wasn't here during those times but I think that the call center was flooded with orders, the technicians were quite busy, and even our network was kind of surprised, I think to see such high take rates. We didn't have capacity challenges, but we kind of had concerns. It was like, "Oh wow, we didn't anticipate 100% penetration and success in a given block or area," so we've had to make some modifications with the network because of that. So it was a very overly effective offer that the team put together.
Christopher Mitchell: Well I want to turn to the digital divide in a second, but I realized I forgot to ask you the question about, you mentioned you haven't finished building out yet. Is that due to just the fact that in any city you have a number of presumably even apartment buildings and other things that are just hard to get to, condos and things like that? Is that the challenge you're wrestling with to finish the build?
Valerie Dodd: Yeah, absolutely. I mean for one, it's been a lot of work and the team worked furiously and it was pretty phenomenal what they did do in the five-year span, but you're absolutely right that there are some areas of town that might be an MDU, it might be a trailer park, where they have an agreement or a marketing arrangement with another provider such that they've got an income stream, so they have not been as willing to sign access agreements with us so we haven't been able to get in.
Valerie Dodd: But the sad thing is those residents will come to city council meetings. They'll call us and just say, "Is there anything you can do? You know, I really want your service," but if we don't have the access agreement, then it's prohibitable. So that's a large part of the issue, so we may never get to 100%. Secondly, as I mentioned earlier, the city of Longmont is growing at a pretty rapid pace and so it's oftentimes hard to keep up with all the new development, and we certainly are planning to be in every MDU that's in construction phase right now, so it's just hard to get to 100%.
Christopher Mitchell: And to stay there, no doubt, but talking about the number of people that would like service but there's barriers in the way, let's talk about what you've already done on the digital divide and then what might be in store in the future. You have an innovative program that I haven't seen elsewhere that I am excited to get a sense of how it's going. Can you tell us about it?
Valerie Dodd: I would love to. It's called Sharing the NextLight and it is a program that was born last year, 2019, and it was for the purpose of making sure that every household has access to Internet, especially those with children, because we know how important the digital world has become from certainly an economic and educational perspective, and so we have made this free Internet service available to certain qualifying households that have children in the St. Vrain Valley school district, and so we work with other organizations throughout the city to identify those eligible households and then we work with the Longmont Community Foundation to help co-fund that free Internet service for those households so that no child is left behind with regard to the digital era, so that is certainly one thing that we're doing. We've got about 160 people benefiting from it and it's a very new program so we're working to partner with other organizations to make sure that we increase and expand that because it's really important to us.
Christopher Mitchell: How does the actual funding stream work for that program?
Valerie Dodd: We have customers that are in the community that may contribute a portion of their bill payment every month. They can earmark that for this program, and so the fund is provided for or funded by local residents and customers, and then it's also co-funded by the Longmont Community Foundation, and so those two funds are put together and then the assessment is made as to how many households we can provide the Internet service to.
Christopher Mitchell: Did you send out a flyer, a notice with the bill, or how did you make people aware of it and have you had any reaction from folks as they're participating in it?
Valerie Dodd: Absolutely. We've had tremendous response to it and it really makes people in the community feel even more connected to the rest of their community. They feel great about it. The recipients are incredibly grateful for it, and the good news is the schools now are distributing devices and iPads so that students have access but they have the device but not always the connectivity at their home, so it's just been overwhelmingly well received. We've promoted it numerous ways and we currently have a link on our website where you can go and click to hear more information and also existing customers can call us to find out how they can contribute more towards that fund in that effort. We're really, really fixated on having a fully connected Longmont that really provides resources for everyone in the community because we know how important they are.
Christopher Mitchell: You were going to go further in terms of talking about what other plans you have and what you're working on when I cut you off earlier to ask more questions about the first program, so let's get back to that.
Valerie Dodd: As we do the analysis and we see where we have great penetration and then where maybe we're a little bit lower than average on penetration, it's a few maybe neighborhoods or some that are economically oppressed, so aside from the program, the Sharing the NextLight that we discussed, another thing that we're looking at implementing is just a reduced rate with probably a little bit of a reduced speed, not the one gigabit, that other families that may not qualify for the free Internet service through Share the NextLight, and so that might be a $20 offer for a 25 meg service offering that's maybe not symmetrical, but it's available to other low income households, so that's something that's very important to us.
Valerie Dodd: One thing that I'm still trying to noodle through and that is if we will be able to participate in a program that the FCC has called Lifeline and basic Internet. Basically the FCC for ETC or eligible telecom carriers that companies or enterprises can participate in this program where you get a $10 discount, so basically it is a subsidy from the federal government that we can pass through to our customers that are low income qualifying households, and so there's discussion that that program may be going away and so that's one of those policy issues that I want to become more vocal about because that would be very helpful for us to be able to pass that $10 discount through to area residents.
Christopher Mitchell: Yeah, I think many people would like to see that program designed in a way that, for instance, if you're serving for instance an apartment building that has many low income folks that you'd be able to very easily apply that to all of them. There's ways not just to actually just program continues as it is, but to hope that it would be designed in a way that a provider like you could even do better with it and stretch it further I think.
Valerie Dodd: Right, and we can cost justify it because the bulk of the investment has been sunk, and so we might as well get as many local community people online as possible. Not only is that bringing revenue to help us pay the bond, which we'll have paid back in 2029, but it also really connects the entire community and helps foster goodness and economic hope and educational opportunity, so it's really a wonderful thing.
Christopher Mitchell: You just snuck in the payment of the debt. Is that ahead of schedule?
Valerie Dodd: I think that's what we've committed to all along and we are confident that we can meet that schedule.
Christopher Mitchell: Okay, excellent. It's worth noting. I mean, almost all of these networks, I'm sure that you've been accused by some of not being successful, of being a failure, by people who are ideologically opposed to cities doing this sort of a thing, and I'd really like to note that your networks are financially solvent and that you are paying all your debts on time and in some cases early, but let's talk about something else that I think some people who are getting more involved with municipal networks may not know today, and that's that one of the biggest bets that I think Longmont took when it first launched was that it did not need to include a linear cable channel. Which is to say, you didn't have to build a head end and include channel contracts and deal with those sorts of things. You decided that you would sell gigabit high quality Internet access and that would be good enough, and boy, you've really demonstrated that you can do that.
Valerie Dodd: Absolutely, and as long as I've been in the broadband business, we've thought a lot about really the primary thing is getting the connection into the home and making sure it's a good fat pipe, and so we don't want to make assumptions about what consumers want or what the future holds. There is so much change about the way people are consuming entertainment and content and video, et cetera and so I think it was a brilliant decision by the city. I've seen other carriers get into the IPTV enterprise or other video approaches and it's so capital intensive. You can spend hundreds of millions of dollars on content and the head end and so it's really cost prohibitive. I think it makes so much more sense to provide the enabling pipe with virtually limitless capacity and let people bring their own video and content however they so choose.
Christopher Mitchell: Now when you launched that, at one point you had a guide of how people could stream video. There was talk about, and I think there was a partnership with a company called, maybe it was Layer 3 or something like that. What is happening today? Is there a most common way that people will access for instance to watch the Rockies or the Avalanche or something like that? Will they use a common video platform or is it all over the map?
Valerie Dodd: There's a lot of stuff that's all over the map and we do look at utilization on a regular basis and see what's consuming some of the bandwidth, and the good news is we've got tons of headroom still in bandwidth which is great, but the usual suspects are always there. Netflix is always predominant, so there's a lot of streaming going on. We don't do a lot of granular analysis. We want to make sure that we understand the utilization trends and we continue to build out and add capacity in our network so that we can accommodate those changing trends, but we feel very confident that we're doing the right thing and really the next phase of what we're doing is continue to fortify the network and ensure its reliability and excessive capacity, but it's also about teaching and educating the community, so it's not just about, okay, we provided you the pipe, but that's not good enough.
Valerie Dodd: We want to go now and educate people. If it's the aging population. We've got a silver tsunami. How do we get in front of those people and say, "Hey, did you know that if you can't make it to the doctor, you can use this iPad and your Internet connection and do virtual doctor visits? Did you know, for maybe students, that you can take online coursework?" And so we want to make sure that we're really teaching and educating people how to use that gigabit connection and let them choose how it works best for them and meets their needs for other resources so that they can have a fuller, more robust life.
Christopher Mitchell: Let me ask you a question in a different vein. I feel like especially with your last answer talking about your desire to really make sure people have a sense of the opportunity it answers itself, but if I was to come in and I was to say, "Okay, I don't care about any of the things that we've talked about for the past 25 minutes," how do I know that this was a smart decision for the city to get into providing Internet access?
Valerie Dodd: My first answer is go on Facebook or next door and look at the overwhelming comments about how much people love us. It's embarrassing almost. Wow. Really it was rolled out to serve the community. You ask the community and they're just delighted. I'm just super overwhelmed with how pleased and the actual speeds, the reliability. The customer service people are here. They're local. They're bilingual. They are so helpful. You can walk in and talk to somebody face to face. You can call in. You can get online. So there's so many ways to do business with us.
Valerie Dodd: We're making it easy for the customers to do business with us, which makes them very happy and grateful. We have the service. They propagate the great story that we have, and so honestly Chris, we have been taking orders for the last five years and we continue to be so successful. Now, we might have to start doing a little more targeted marketing and making sure, as I mentioned earlier, that we're assessing people's needs and we're addressing the low income people, maybe addressing the nonprofit community, the startup community, and making sure that we're truly getting everyone online but I think the numbers speak for themselves. The customer comments speak for themselves.
Christopher Mitchell: Now, have you considered moving and starting to offer service to some of the pockets nearby that are outside city limits? And I know that's always a challenging question when you are not able to serve 100% even if residents, they may intellectually understand that their landlord is standing between them and the connection, but if they start to see you serving others it can get frustrating so I know it's a hard decision, but I'm curious if you can share any thinking on that.
Valerie Dodd: There is overwhelming demand in the peripheral communities to Longmont and people are just clamoring for our service. As you mentioned, our first obligation is to Longmont, so when we feel like we have pacified that obligation and built to everyone with whom we could get access rights, then we will certainly consider that. Want to make sure that people in Longmont aren't paying to serve those outlying communities and that we do keep things solvent, but instead that maybe we can leverage some of the assets we have to provide a great service to neighboring communities that may not otherwise have it while also bringing some money back to the city of Longmont. So I do think we are open to that. We're not to that point yet, but it's certainly something that we're discussing.
Christopher Mitchell: Yes, and for people who aren't familiar, you've got some interesting competition in that potentially. I could imagine that in five years you see between you, Loveland, Estes Park, and Fort Collins sort of competing over who's going to connect the left behind areas. But let me ask you the-
Valerie Dodd: That would be a great problem for those communities.
Christopher Mitchell: Right. I can just imagine those city council meetings with you each giving your presentations and trying to be very polite to each other but yet also highlighting why you're better.
Valerie Dodd: Yeah, and I think probably geographics will drive a lot of that decision making, and then honestly, we're well ahead of the surrounding communities. We wish them great success and we do partner with them and we share best practices, but we certainly are a lot further down the road.
Christopher Mitchell: The last thing I wanted to ask you about was that our previous interview I think with Longmont was Tom Roiniotis, who has retired, a wonderful general manager, when the utility was moving forward. It now has a director of electric service, and you're the director of NextLight and I'm curious if you can share the thinking in terms of having a different director for these two important services.
Valerie Dodd: Yeah, I can give you my perspective. Of course our city manager I think really led that decision, but while the two are similar in that you have to have common placed infrastructure, we share pathways and some resources to build the network, but when you look at operating the businesses, they're very different. The electric side, the power side is truly a utility, and they take orders for service. They don't have any competition.
Valerie Dodd: On our side, for one it's a little bit more dynamic than is the electric power side of the house, and so it's a very dynamic, highly competitive industry and a really important one. We're not quite a utility and we certainly, we have been taking orders because our service offering has been so valuable and so reliable and well appreciated, but I think the recognition was that we need to run this differently, and I think I was brought in because I do have a business perspective meaning I want to make sure that we're ensuring operational efficiencies, we're paying back the bond on time if not early, we're incredibly judicious about how we spend our money and that policy, practices, standards, all of those things are super important, but maybe even the most important thing is the customer experience, and so in a competitive environment sometimes at the end of the day it's the customer experience that makes a difference between going with one carrier or another, and so I'm here to make absolutely certain that our processes are easier, our customer journey is easy, again, simple to do business with us, and that we delight our customers every step of that journey, and then by providing an exceptional product.
Christopher Mitchell: Do you still share employees? For instance, the people who answer the phones? Or is that also being separated?
Valerie Dodd: It is separated. Again, on this side of the house I think we really need a sales oriented and customer oriented group. Not that we don't want customer oriented people on the other side. We certainly do, but there is some salesmanship that's required. Qualifying. We have different service offerings. It's not just, "Do you want power? Yes or no?" It's, "What speed is best for you? Do you need phone service?" So there's some different skillsets that are required.
Christopher Mitchell: Great. Yeah, and we've seen different utilities manage those challenges in different ways, so I just like to highlight that for people to understand that they should be looking at what works best for them and that this is a model that's working very well for you, so I really want to thank you for your time and I've really enjoyed this interview catching up on what's happening in Longmont.
Valerie Dodd: Thank you so much for the opportunity. We're really proud of NextLight and are happy to always share our story, so thank you and send the snow our direction.
Lisa Gonzalez: That was Christopher with Valerie Dodd, the director of NextLight, Longmont's Colorado municipal fiber network. Be sure to check out the Longmont tag on MuniNetworks.org to learn more. We have many stories on NextLight and the community of Longmont. We have transcripts for this and other podcasts available at MuniNetworks.org/broadbandbits. Send us an email at podcast@MuniNetworks.org with your ideas for the show, and follow Chris on Twitter. His handle is @communitynets. Follow MuniNetworks.org stories on Twitter. The handle is @muninetworks. Subscribe to this podcast and the other podcasts from ILSR, Building Local Power and the Local Energy Rules podcast. You can access them anywhere you get your podcasts. You can catch the latest important research from all of our initiatives as you subscribe to our monthly newsletter at ILSR.org. While you're there, please take a moment to donate. Your support in any amount helps keep us going. Thank you to Arne Huseby for the song Warm Duck Shuffle licensed through Creative Commons. This was Episode 392 of the Community Broadband Bits Podcast. Thanks for listening.