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Transcript: Community Broadband Bits Episode 100
Thanks to Jeff Hoel for providing the transcript for episode 100 of the Community Broadband Bits podcast with Dr. Robert Wack on Westminster's pending open access fiber network. Listen to this episode here.
Dr. Robert Wack: They heard about our network. And now, in addition to moving the distribution facilities down, they're also going to moving their -- some portion of their IT operations down here, to avail themselves of the network that we're building.
Lisa Gonzalez: Hi there, again. You're listening to another episode of the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. This is Lisa Gonzalez.
We started covering the Maryland community of Westminster in 2012. Businesses in Westminster have struggled with the lack of broadband. But community leaders are now taking matters into their own hands. In recent months, the town has moved forward with an initiative to improve local connectivity. Interest is high, even before hanging or burying a single mile of fiber. As it prepares for 2015, the City Council has included $6.3 million of funding in its budget for a broadband pilot project. The community just issued its request for proposals on May 22nd.
Dr. Robert Wack, a member of the Westminster City Council, visited with Chris about the project. Dr. Wack has played an instrumental role in the project planning from the beginning of the initiative. We often discuss broadband as it relates to telehealth. In this interview, Dr. Wack describes one of his own personal experiences. Here are Chris and Dr. Robert Wack, from Westminster.
Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. And today, I'm speaking with Dr. Robert Wack, City Council member of Westminster, Maryland. Welcome to the show.
Dr. Robert Wack: Thanks, Chris.
Chris: It's terrific to have you on the show. We've been following Westminster pretty closely, because I think you have a really innovative model, in terms of how you're going about building this fiber network that will be owned by the community. But let's start with a little introduction to Westminster, for people who aren't familiar with it. Can you describe Westminster to the audience?
Dr. Wack: Sure. Westminster is the county seat of Carroll County, which is located right smack in the middle of the state of Maryland. We're about an hour due north, right out of Washington, DC, about 45 minutes north and west of Baltimore. It's a typical community in the United States, in that it was formerly almost entirely agricultural, and is now transitioning into a bedroom community for the Baltimore-Washington area. The total population in Carroll County is about 167,000. In Westminster, it's about 18,000 people. And, unfortunately, about two-thirds of the community leaves Carroll County every morning to go to work in either Baltimore or Washington. So, we've not done a good job with local job development and local economic development over the years. A relatively affluent community, you know, in terms of median income and whatnot, but two-thirds of the community goes somewhere else to work every morning.
Chris: So, we actually learned about Westminster, here at the Institute for Local Self-Reliance, only after we learned about Carroll County's network. And we had actually done a podcast with them a little while back. I think one of the things that you worked with Carroll County on is this pilot project that started some of your fiber investment. Can you tell me a little bit about that?
Dr. Wack: So, back in 2003, after I got on the City Council, I was appointed to be Westminster's representative on the Cable & Regulatory Commission in Carroll County. And one of the issues that was before the commission was what to do about the Inet fiber that had been negotiated in the most recent cable franchise renegotiation. So, as part of that, the cable provider had installed some dark fiber around the county, connecting up some county buildings and some of the buildings in the municipalities. But nobody had done anything with it. It was just dormant. And so the Chair of the commission at the time, Ken Decker, and I made it our mission to somehow put that fiber to use. And during the course of trying to resolve the myriad challenges that we faced doing that, we got together with Gary Davis, from the Carroll County Public School System, and Steve Powell, from county government. We realized, you know, we don't need that Inet fiber. We can just build our own, and solve a whole bunch of problems for the county, county government and the county school system, and save a boatload of money in the process.
And so that's how the Carroll County Public Network was born. And the commissioners at the time had real vision, and they sunk a big chunk of money in that. And we built this middle-mile network connecting all the schools and county buildings together. And realized a considerable savings, just in the first several years of operation. They basically made that investment pay for itself already, just in deferred costs.
So, they also have a whole bunch of dark fiber installed, that they're now looking to lease to the private sector. And that laid the groundwork for us to do our Westminster Network, because now we have the middle-mile connection out to the rest of the world.
Chris: So that led, then, to a different pilot project, which is the -- you're now connected some areas in your own community. I believe it was a retirement home?
Dr: Wack: That's the first phase, that we just put a construction RFP out for. And that was -- initially, the idea was that this was going to be a pilot project, but we've generated so much enthusiasm, and got so much momentum, that we're already moving -- calling it phase 1, and we're planning to build out to the rest of the community. But it hasn't been connected yet. It's going to be -- we're going to break ground this summer, you know, and have that done this summer, and hopefully lit by the end of this year.
Chris: Let's walk through that then. So you announced that you were going to be doing this pilot project -- which I misremembered -- and then you have all this outpouring of interest from the community. From what parts of the community? Like, who was really excited when they heard that this was a possibility?
Dr. Wack: Well, certainly the two areas that were being built out first, the retirement community -- Carroll Lutheran Village -- those residents are beside themselves. Because, you know, people -- there's this sort of stereotype of the older generation being less tech-savvy, and that couldn't be farther from the truth with this community. They get it, and they want the services that are possible with a high-end broadband system. And they are just ready to go. And so, they are the most enthusiastic.
And then the business community. They face challenges every day with the lack of quality broadband. So they've also been very enthusiastic about the supporters.
So the combination of all the positive feedback we've gotten from just floating this idea of this pilot project has energized the city staff and other elected officials to -- and sort opened their eyes to the potential of this, and the wider appeal to the entire community. And so we're plowing right ahead with the rest of the build.
Chris: What I find really interesting is the way you're going about financing it. Because a lot of the communities who have done something similar have gone out and they've bonded. Or they've done something separate rather than just appropriating the money for it. Now, I understand that you have calculated a payback period, and so it's not a matter of you just sort of seeing this as something the city's going to spend money on. But how did you decide to go about appropriating $6.3 million for it, as opposed to using some other financial stream?
Dr. Wack: The first phase, we had the cash for. We're estimating it's going to be about $1.2 million. And we had reserves set aside for exactly this kind of thing: an opportunity comes along and presents itself, it was nice to have those reserves available. You know, we had prudently saved. And now we had this opportunity, so we were able to do that. So the first phase is fully funded.
The second phase -- the $6.2 million you referred to -- that is going to be bonded. But we have identified a portion of our tax revenue stream that we can set aside for the debt service on that $6.2 million. Worst-case scenario, this -- you know, we aren't able to lease any of this dark fiber, and we're just holding a bunch of dark fiber -- we can carry that debt. Which -- that's not our plan. But worse comes to worst, if that were to happen, it would not kill us. And it would not be a fatal financial blow. We have modeled this -- that we're going to least this fiber and we're going to generate a certain return that should cover our debt service plus the minimal amount of maintenance for the dark fiber. We're projecting within three to five years that we should get to that point. And that's with some very, very conservative assumptions.
Chris: Conservative assumptions, plus, you have this sense from the business community that there's this overwhelming need no one else is going to swoop in and provide.
Dr. Wack: Oh, yeah. Absolutely. Absolutely. That's why I'm confident that we're going to be able to hit that target.
So I'll give you an example. We did a survey of the business community. And, I don't know, it was probably about six months ago, just to sort of test the water. And with some generic questions about -- are you looking for better broadband services? You know, if a higher-capacity service were available, would you switch? And we had -- 60-70 businesses responded. And 80 percent of them responded "yes" to everything -- we want this service, we're willing to pay for it, and we desperately need it. I think that was part of why, suddenly, we had this, you know, dramatic surge in interest in the broader project, beyond just the first phase, or the pilot project.
Chris: One of the results that seems to already have occurred is that you have an interest in some businesses -- or at least one business -- outside of the community that's moved into the community, and is very excited about this network. Can you tell us a little bit about this company?
Dr. Wack: This company is called Carlisle Etcetera. They're a manufacturer and distributor of women's clothing. And they are based out of New York. And they have an operation already down here. They do men's clothing. They were looking for a new distribution facility. So they came down to Westminster. And we had some warehouse space out by our airport area, where our first phase is going to be constructed. And they were interested in that. But in the process of doing their due diligence, they heard about out network. And now, in addition to moving the distribution facility down, they're also going to be moving their -- some portion of their IT operations down here, to avail themselves of the network that we're building. So -- and that's even before we've laid a single strand of fiber. But, you know -- so that's how important these kinds of services are to ANY business. I mean, these guys are clothing manufacturers, and they need broadband, just for their operations.
Chris: These businesses, as they're getting hooked up, then, they're not actually going to be getting services from the City of Westminster, though. They're going to be having a choice of multiple ISPs, as I understand it, because you're going to embrace this "open access" type approach.
Dr. Wack: We're not a major metropolitan area. So we don't have a huge diversity of choices for telecommunications and Internet services. You know, we're sort of stuck with the incumbents. And they're not terribly interested in changing their practices in our community. So if we want an array of choices and we want some competition that's going to drive better services at lower prices, we're going to have to create the environment that allows that to happen. And the way we're going to do that is to build out this publicly-owned communications infrastructure. And then, you know, operate in an open fashion, so that any provider can come in and provide any service.
Chris: Do you have any providers already lined up, who are excited to work on the network?
Dr. Wack: Lots of interest. But because we don't actually have any fiber to lease yet, we don't have anything signed. So, our next step, after we get this first construction RFP locked down, is -- we're going to be putting out another RFP for our network operator -- who's going to, in this stratified business model we're using, that will function as a utility bandwidth provider. And then, on top of that layer, we'll have the individual service providers, who will be the ISPs and provide voice services and video services and cloud services and home security services and healthcare applications. It's a model that's used widely in Asia and Europe, not so much in the United States. In fact, if -- or when -- we successfully implement this, we'll probably -- we'll be the first successful implementation in the United States.
Chris: As you're building the network out, will you be connecting everyone, initially, or just those who are going to sign up for services immediately?
Dr. Wack: Think of it this way: we're going to be building the "streets," but we're not going to be building the "driveway" until somebody asks us to. And we can't, legally. A property owner has to invite us onto their property to build their "driveway," or, you know, put in the drop that's going to connect them to the network. So, we will certainly make the offer, to the entire community -- or, to the areas of the community where we're in the "streets." We can't do it until we're out in front of their house. It's going to be available to everybody, but the drops will be installed on an as-needed basis.
Chris: Now, taking a step away from Westminster, as a doctor, I understand that you have wonderful anecdote for why telemedicine is so important. Tell us what it is.
Dr. Wack: Sure. So, I work in a pediatric emergency department in Frederick, Maryland, which is one of the next towns over. A pretty large community, with a community hospital. And we have a relationship with Children's Hospital down in Washington, DC, to provide pediatric cardiology telemedicine services, specifically echocardiograms, which are ultrasounds of the heart. And so, one evening -- it was a Sunday evening -- a local pediatrician had seen an infant in his office, and was concerned that there might be a serious heart problem. And so he sent the baby over to us in the emergency department, and we called Children's Hospital and set up this remote echocardiogram technology that we have. It transmits an enormous amount of data. And the pediatric cardiologist down at Children's Hospital sits and does the echocardiogram, with our technician here in Frederick -- you know, we're about 50 miles apart -- and in real time, he's watching this study, and talking with me, the tech, and that parents, who are sitting in the room and can see everything. They can see the cardiologist on a screen; they can see the echo on the screen. So they can actually see their child's heart as they're doing the study. And so, in this particular instance, the tech did the study, the cardiologist read the study -- and this was on a Sunday night, keep in mind. At the end of it, the cardiologist was able to say, you know what, this isn't a big deal. The baby doesn't need to come down to Washington, DC. They can go home, and we'll follow this up as an outpatient. Just a couple years ago, I would have had to transfer that baby down to Children's Hospital, and the parents would have had to drive down on a Sunday night. They wouldn't have been really seen until probably the next day. It would have been a separate hospital admission, and a lot of inconvenience and worry for the parents. And today, we were able to ask the question, answer the question, and get that family back home, and back in their own beds. To use that technology, you know, that's requiring leased lines, it's very expensive. You know, if you have a ubiquitous, affordable broadband, those are the kinds of things that become much more available, to help push high-end services -- medical services -- all sorts of services -- deeper out into the community. A lot of benefits.
Chris: My mom works for the Mayo Clinic as a nurse, and so I pay a little bit of attention. And I saw that when gas was over $4.00 a gallon, the number of people willing to drive over a hundred miles to the Mayo Clinic dropped significantly. And, you know, these sorts of things are really important, to try and help people -- not just, you know, sort of the peace of mind of getting the news quicker, but also just making sure people are actually getting the care that they need.
Dr. Wack: Back in the '20s and '30s, when rural electrification was occurring, everybody was only interested in light bulbs. And nobody was thinking about FAX machines and microwaves and the personal computer. And yet, without the rural electrification, none of that stuff is possible. And that's where we're going with broadband. Right now, everybody's thinking about e-mail and watching YouTube and whatnot. But there's things coming that we can't even -- we don't even -- thinking of. But it's all the middle school kids who, right now, will make those things happen. But we have to give them the pathway -- the tools -- the pipes -- to bring those things to fruition.
Chris: So, thank you very much for coming on, and giving us a sense of how you're tackling this problem in Westminster.
Dr. Wack: Thank you, Chris. And thanks for all the work you guys do.
Lisa: We have several stories on Westminster, posted at muninetworks.org. If the story interests you, you should also check out the articles we've published on Carroll County, Maryland, and their public network.
Send us your ideas for the show. E-mail us at email@example.com. Follow us on Twitter. Our handle is @communitynets. This show was released on May 27th, 2014. We want to thank the group Valley Lodge for their song, "Sweet Elizabeth," licensed using Creative Commons. And thanks for listening.
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