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Transcript: Community Broadband Bits Episode 306
This is the transcript for episode 306 of the Community Broadband Bits Podcast. Doug Dawson from CCG Consulting joins the show to discuss his work, 5G hype, and the Connect America Fund. Listen to this episode here.
Doug Dawson: What we find is fiber communities grow when other communities around them are shrinking.
Lisa Gonzalez: This is episode 306 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. While at the Broadband Communities Summit in Austin, Texas. Christopher spoke with community leaders, advocates for universal broadband, and consultants. In this episode of the podcast, he sits down with Doug Dawson from CCG Consulting, one of the guys who's been in the business for decades. Christopher and Doug touched on a lot of issues, including his work with municipalities and publicly owned Internet infrastructure. He talks about choosing a consultant, marketing and costs, as well as how to deal with misinformation. Doug and Christopher also spend time talking about the 5G hype, rollout and specs, and whether or not it really is the solution for rural America. They talk about the Connect America Fund, and Doug shares his thoughts and predictions about the repeal of federal network neutrality protections and what it means for municipal networks and small ISPs. Check out CCGcomm.com, for more about Doug's firm, and be sure to visit Pots And Pans by CCG.com. That's Doug's blog. Read some of his excellent articles on telecommunications and related policy. Now, here's Christopher with Doug Dawson of CCG Consulting.
Christopher Mitchell:: Welcome to another edition of the Community Broadband Bits podcast. I'm Christopher Mitchell:itchell with the Institute for Local Self-Reliance with another show coming out of Austin, Texas, at the Broadband Communities Summit here in lovely Austin, Texas, right at the edge of [Texas] Hill Country. I'm speaking today with Doug Dawson, the founder and president of CCG Consulting. Welcome to the show.
Doug Dawson: Oh, thank you, Chris.
Christopher Mitchell:: So Doug, you just mentioned that 20 year anniversary. You've been doing this for some time.
Doug Dawson: We have been doing this for some time, and that's, uh, my firm CCG consulting. I've been doing it for quite a bit longer than that. So first telecomm job in 1975.
Christopher Mitchell:: There's this demeaning saying that those who can't teach -- but you've run many of these companies.
Doug Dawson: Yes. The hands on experience in ISP, Telcos, cable companies, electric companies, all those things, you bet, so --
Christopher Mitchell:: Right. So you probably go way back to, um, you know, when people thought, "Hey, broadband over power lines is going to change everything, we're going to have real competition."
Doug Dawson: Yeah. It didn't quite go as they expected did it.
Christopher Mitchell:: No, no. We were just, uh, we did an interview recently with Michael Render who -- we were going back and talking about the old days when there was like 3000 passings of fiber networks. Um, and, you know, I'm just curious, when did you start offering advice and what was the background of that? People just-- were cities coming to you or how did you get into that market?
Doug Dawson: When I first started CCG Consulting. We started with the 1996 Telecom Act. And so there, our concept was "Let's help people become CLECs --at that time, competitive telephone companies. But even before that, I had been working with another consultant. And we launched -- I launched several dozen dial up companies, so we -- even back then, it's like, "How do you get into the business? How do you find your customers?" I mean just the same old, "How do you launch a successful broadband business?" [It's] hard to call dial-up broadband, but at the time it was revolutionary. So, um, and so I've been doing it ever since then. When I first founded CCG, my first clients were telcos -- because they wanted to start competitive ventures. Very soon thereafter, all these folks, who were not telcos, started coming to me. And over the years, uh, I'd say half of my new business now is municipalities. [We] still have a lot of telco work. Uh, but we almost entirely work in competitive markets. We don't really do much legacy work even for all those clients where we help them with their competitive arms.
Christopher Mitchell:: So you have a lot of clients, both public and private, but they're almost all competitive. Like they're the new entrance.
Doug Dawson: Yes, This is all people that are over building networks.
Christopher Mitchell:: Right.
Doug Dawson: So--
Christopher Mitchell:: So you also do the Pots And Pans blog. Um, I forget exactly what the url is.
Doug Dawson: Pots And Pans By CCG.
Christopher Mitchell:: It's a wonderful daily story. I've -- as someone who had long done daily stories -- now Lisa Gonzalez does all the writing for our daily stories. I know it's a grind. You seem to find interesting insights to get a story up every single day that I usually find quite compelling.
Doug Dawson: You know, this industry, it's not hard. In fact, I throw away three topics a week. It's like the topics just come to you because I talked to folks every day and they say, you know, what do you think about this? And boom, there's a blog.
Christopher Mitchell:: Right?
Doug Dawson: So it's, it's amazing what's going on. When I first started five years ago, it was a lot harder. I had to struggle like, what the heck am I going to write about tomorrow? And now it's just the opposite. It's like, what am I not going to write about?
Christopher Mitchell:: So let's, let's dig into one of the questions I wanted to ask you when, when I finally cornered you and got you into our studio here, um, was, was -- any lessons that you've drawn from all of the years of working with municipalities that might be relevant for someone who is in a community where they're going to be starting in network or there's a very good chance they're going to be starting in network.
Doug Dawson: There's a lot of lessons. One is, which people don't realize, it costs a lot more money to get started. Communities will put together a $50,000 to do a feasibility study and just not realize it's going to cost a whole lot more than that before you get into the business. And so, so you can't underestimate the cost of getting going. The cost of launching a new businesses is -- you know, there's a lot to get done. Um, we always do what we, you know, Gantt Charts, which are project plans for, for a new fiber network and literally they will have 3,000 tasks on them that have to be finished. Everything from marketing to the network construction items and so on. So it's a complex business. Um, and so the second piece of advice is go find the experts who can help you do it in and get folks who've done it before. There's a lot of consulting firms out there who are good at one piece of it, but you need to find somebody who does everything you're looking for because there's not very many of us.
Christopher Mitchell:: On that point, I think, would you agree that there's some consultants that uh -- I think if we wanted to we could talk about how we think that they are ones we wouldn't recommend cities come to -- but in general, I think every consultant has strong points and weak points, and it's not so much like we're going to find the best consultant. It's, we're going to find the consultant that matches our desires and needs and that sort of thing. Is that right?
Doug Dawson: That's exactly right. So, you know, there are one or two bad consultants, but hopefully people don't hire them, but most of the consultants are pretty good in this industry. And so, you know, the question is where do you want to take this thing? So if you, if you know you're going to build a wireless network, let's talk to someone who's done a lot of that. If you want to build fiber, make sure you get that. The number one issue nowadays that I give people advice on is, you know, the engineering parts, etc. There's dozen engineering firms in the country who can tell you how much the fiber networks going to cost. That -- once you have that number, you're sort of done [with] that, the hard part's raising the money. So, you know, if you don't already know how you're going to raise the money, then you better pick a consultant who can help you figure that out because that's -- that's 80 percent of the actual grind of getting one of these things done. It's money. And that's the one thing that stops projects from getting finished nowadays so that, you know, that's everything else is -- everything else is knowable. That one's just really hard. You know, but if you're in a city who just knows that you're going to pay with this by a bond, then you know, that's not such an issue there. But most people don't have that luxury nowadays. You have to get very creative. Uh, usually it's multiple sources of revenue to get these things done. So, you know, so -- so look forward, you know, what are you gonna do after you get the study. You know, you don't really want to change horses in the middle of the stream. So pick a consultant who, who's looking out at the end game and we each have a different view of how to get there and, you know, make sure when you interview us to ask those questions, I mean, you know, what do you, what do we do next and make sure that they know what they're, where you're going.
Christopher Mitchell:: I suspect that a lot of the cities, and probably the other private companies as well, that come to you, who are established, are coming to you and saying, hey, you know, we've hit this speed bump or we're concerned about this issue. Is that, is that something you're often dealing with? Like sort of troubleshooting and evaluating?
Doug Dawson: Yeah, I mean our company, actually our major practice is. We try to lau -- we'd launch these new markets, but we also help people take old markets and make them better. Now. If you built it 10 years ago, but you're still not making as much money as showed, why aren't you? And let's go in and fix those problems. Uh, and so, you know, we all -- [for] a new guy, we try to make sure that we've addressed all those up front because you know, there's 20 keys to success, you know, any one of those is not done right and you're not going to do as well as you ought to. The network has to be built right. You've got to have a solid marketing plan. You know, again, the money. You've got to have -- you've got to have the right people, not overstaffed, you can't have expenses too high. You know, nowadays lean and mean is the way to go. And so, you know, you have to have all of those pieces in place. And you know -- and sometimes that doesn't fit very nicely into a municipal structure. So that becomes a real issue of how do we get it in here? How do you govern it? You know, one of my best stories on things not to do is Bristol, Virginia. [It] was one of the first cities to build a broadband network. Six months after they built it, the city council came in and cut all the rates by 15 percent because there was an election year, and of course that all of a sudden took this company on a great trajectory to put them straight underwater because they didn't have that much profit. And so, you know, six months later they were raising them back up again when they saw the consequence of that. So you have to shield these businesses from politics, which is not an easy challenge. Also, you know, that's one of the other big lessons is, you know, do not let these become political issues because if you do, then they will absolutely always run into problems. The successful cities have somehow kept them apart and that's not easy to do, but --uh, but they've been able to do that. So --
Christopher Mitchell:: Right. I think it is worth noting some of the structures we've seen are where the city council's not the direct oversight board. There's a board that is a maybe appointed with staggered terms so that a single shift in public attitude can't result in a major change to a utility that has to have a longterm plans.
Speaker 3: Well and you want that. That's exactly the structure we recommend and that board has to be engaged people, who have a varied background. You want a banker on there, you want maybe local tech people on there, and you want some local businessmen on there who understand how to run a business. I mean that's -- you know, so you don't need fiber folks because you know your board doesn't have to know your business. They have to know how businesses work, and so what you don't want is a board also made up of other local politicians, and that's the only people to run it, because now you haven't shielded it from politics though.
Christopher Mitchell:: One of the things you mentioned is the thing that I -- I tend to think is possibly the single biggest problem cities have run into when they built these networks and that's marketing. I think you, you noted the overstaffing and that's a very serious concern, but the marketing seems to be something where cities that try to do it in-house, they don't bring enough a external like non-city fo--- people who have a different focus to it. Um, they seem to struggle.
Doug Dawson: There's probably been 10 fiber projects, who have struggled, a few even failed almost universally they were because of lack of sales. There's literally been city projects who launched open their doors, didn't even make any public announcements and assumed that people would just come and sign up. They don't. And so you get about 20 to 30 percent of the market of people who just hate the incumbent cable company or something. Then after that it's hard work. It's just like selling anything else. And so, you know, cities don't have that mindset, so you better bring somebody in who does. I mean, you don't, you don't want your general manager to be a guy with 30 years of city experience. You want them to be a guy who's been in a commercial company. So, uh, so that can be fixed. I mean, some of those ones who struggled, then we came along and said, here's how you fix this, and sure enough, they went out and did the sales. Uh, the probably the best example of that is MINET, a municipality in Oregon. They did exactly what I just said. They did no marketing. Three years later they looked up, I think they had a 35 percent market penetration. You know, they hired me. We came in and looked at it, figured out how to make it better. Today they are, they might be the highest one. They have -- it's now approaching 85 percent market penetration, which means they basically have every broadband customer that is in the market.
Christopher Mitchell:: You mentioned this morning on your panel that, that they're going around into nearby population centers to encourage more people to come in. And they've run -- they've run out of people to sell that--
Doug Dawson: So they're now -- they're now recruiting customers to come to town. That's their strategy to grow, is to actually bring in more people to homes there, and it's working. They have the, what we find is far fiber communities grow when other communities around them are shrinking. So there's new houses being built. So--
Christopher Mitchell:: So before we change to a different topic, I just want to throw something at you, and that's um, you know, Christopher Yoo has come out with a study that's being repeated from University of Pennsylvania. We've done rebuttals on our site. Um, you know, Steven Titch has probably taken aim at you many times over the years. There's many people who have been paid to say, "Municipalities just can't do this. They all fail. It's a disaster." How do -- how do you respond in a minute to that sort of thing?
Doug Dawson: First off, municipalities have a different way of measuring success. So success to them is a business that completely is cash self-supporting. So as long as you're generating enough cash to pay operating expenses, cover the debt, and pay for the capital you need every year to keep growing the business, then they think that that's a success.
Speaker 3: No city's upset if they make more than that. They like -- you know, there's nothing wrong with putting money back in the city coffers. But, you know, most of the fiber-- most of the projects have gotten to that point. Now, when you look at a business that's just breaking even with cash, which they are going check, we are completely successful. Accounting books -- it'll look terrible because fiber projects are capital intensive and they'll have a mountain of depreciation expense. You know, the city of Lafayette, Louisiana, has been fighting a public battle for the last five years because their book show a loss, yet they're generating very positive cash and they're growing, and they're now starting to build out of their money into the surrounding communities. They're completely successful. Uh, but, but uh -- folks point to them and go, "They're not successful." But just because they have an accounting number loss which is completely driven by depreciation, you know, they never intended to measure their company that way. They have no reason to do so. And there's plenty of commercial companies who have booked losses but are successful that, you know, that don't cover depreciation. That's not how -- that's not how you measure this kind of business. Infrastructure companies are not the same as retail companies or something like that. So, so the answer is there are some municipal failures, but most of the ones that, those guys point out in their articles are actually successful. I know that. I see their books. I'm in the books of 100 different companies. I know what they're really making. So when they tell the story that they're profitable, I know if it's true or not, and most of them are successful. So--
Christopher Mitchell:: Uh, I want to get to a different topic. You've covered this really in depth. In fact, I think you've had some of the clearest writing on this. 5G is going to make all of this pointless because we're all going to be connected in a utopia of incredibly high-capacity services that are magic. [Sarcasm]
Doug Dawson: I actually have a new thought on that, that I haven't made it to my blog yet. I'm-- I'm starting to wonder if there's actually any -- going to be any builders of 5G out there. All three of the major telcos have made it very clear in the last six months that they're backing out of the residential broadband business. Uh, the cable companies all have gigabit networks or will have gigabit networks, so they're not going to be spending money on 5G. And if the telcos don't do it, then who the heck is? Who are these companies who are going to step in and spend billions of dollars to do this? You know, Verizon still might, but I'm pretty sureAT&T is really not after this and CenturyLink -- the new management from Level 3 has made it clear. They are definitely not going to be doing this. So there may be nobody building those networks. But, but even if they do, if somebody does, those networks still need a lot of fiber. They're really capital intensive. They're large investments. They're still going to have to hit the infrastructure kind of returns. We're not even convinced that it's actually cheaper than building Fiber-to-the-Home. You know, you're replacing a fiber drop with electronics that may not be cheaper. Uh, you know, it could, but right now that stuff doesn't even exist. So we're -- we're talking about this fantasy future business that's gonna solve all the broadband problems in America, and there -- you can't even -- no one's making any equipment to do that. I've got a long history of watching wireless ventures fail because the technology never worked, right? So, you know, I don't trust anything till I see it working in the field and we're probably five years away from actually working equipment. So, uh, it has great promise. Quite honestly, if it works, the municipalities will be using 5G, why would you not? If that's a better alternative than Fiber-to-the-home. So you know, if that's a better technology than people will build it, but I don't see someone making these huge investments and definitely no one's going to make these investments in a rural community. It costs just as much to put the fiber in for 5Gs as it costs to put the fiber in for Fiber-to-the-Home. So if that's not feasible today in a rural community, that's not going to be feasible for 5G either. Rural communities are never going to see 5G then -- I go to places today who haven't seen 4G yet.
Christopher Mitchell:: One of the things that I like about your writing about 5G -- and people if they go to your blog, you have a tag 5G they could just focus on that if they want to -- but you talk about how things are likely to roll out, and it sounds like you're still working over how you think that. One of the things that I thought was particularly well done was discussing that the 5G standard, which is not yet completed, you're talking -- those 5G, that gear is not going to be out for many years. Um, but it is expecting -- we're expecting to see like a requirement of 20 gigabit to each wireless node, and you were pointing out that that's not really how a lot of these 5G companies are going to do it. And I know AT&T and Verizon a number of the times in which in five years I might have a phone and it might say 5G in the status bar. Um, I might be on a node that isn't doing that, that doesn't have that capacity, but they'll just still call it 5G and I'll have wireless backhaul and my experience won't be that different from 4G.
Speaker 3: But first off, let's talk about 5G cellular. You know, it took us 10 years, last year we actually saw the very first 4G actual phones. And so we think we're at the end of the 4G product. We actually just finally got to the 4G product. What we had was 3.1 , 3.2, 3.3, and now we finally made it to 4. It's going to be the same migration to get the 5. Verizon says they're going to roll out 5G next year. They're not, they're going to roll out 4.1G because there's 13 different aspects of 5G in the cellular world that you have to meet. And that's the sort of the standard. And so they will start picking away at little pieces of those new improvements. Uh, but even when they're all finished, 5G cellular, if you go right back to the specs, it says, deliver 100 megabit download, 20 megabit up. And that's what they're shooting for. They're not shooting for gigabit cellular. That's not part of the, of the specification they're shooting for. The main reason behind 5G cellular is to do Internet of things. A cell sites gonna be able to talk to 100,000 devices today. It's way smaller than that -- which is why when you're in a convention center like this, you can't get a cell phone connection. There's not enough connections on the south side, and their -- and their picture. Verizon and AT&T believe that they want to conquer the IOT world, but they're starting from a massive deficit because today every device is connected to Wi-Fi. You know, they may not ever get there. The, you know, I don't know why people would pay a subscription to use their IOT devices if their home Wi-Fi connection does it for free. So I think they have a very big uphill battle. The 5G that they're really talking about, and people conflate the two issues, is 5G point-to-point radios. Those can do gigabit speeds. That's the stuff though that you're gonna need a fiber right up to those things to work. If you do wireless backhaul and then we're gonna -- and we're going to end up with residential overbuild neighborhoods that have 100 meg service just like you already get today. Nothing wrong with that. And if you build that in a town that doesn't have broadband, that'll be awesome, but it's not automatically going to be gigabit not unless you put the fiber everywhere. and that means fiber to every one of those things. I know every third pole is gonna want fiber to it and that's pretty expensive.
Christopher Mitchell:: The other topic I really wanted to talk about, and this is something where again, I feel like you've covered extremely well, is the Connect America Fund. You outlined in a way that I hadn't seen anyone else do and frankly I still haven't seen in any mainstream, you know, telecomm, traditional press reporting how AT&T is spending -- It's like what? Two and a half billion dollars it's getting? And what people primarily in the south and in Appalachia are getting from AT&T's subsidies to expand rural broadband. So let's just, let's just start there. What is AT&T delivering with the two and a half billion dollars that we're giving it?
Doug Dawson: Let's go back to the beginning because what happened with, with the CAF II fund was up to the 11th hour that was going to be a reverse auction where everybody could come in and bid for that money and all of a sudden the order came out. And it floored all of us because they just gave all of the money to the big telcos and no one else got a penny of it.
Christopher Mitchell:: And this was under Obama's FCC.
Doug Dawson: Yes, this was. Yes it was. And so obviously the lobbyists, you know, from the big companies won their battle. So they just said, "Here is your billions of dollars. Go do what you need to do." And their goal was to do 10 Mbps / 1 Mbps speeds, which even then was already obsolete. I mean, you can't run a home on a 10 Mbps / 1 Mbps connection today. So it's, that's a ridiculous goal. The CAF II fund says make your best effort to go out and do that, and we know what's going to happen. They're going to run out and they're going to build homes and they're going to increase speeds and when they run out of money, they're going to stop. So even all the people who are covered by that footprint that they're supposed to cover will not be covered. So some folks will get no improvements. AT&T is using this as the way to tear down rural copper. So their solution is about 90 percent of the places is they're just going to start selling folks cellular connections, which they already can do today. So they are going to use this money to sort of beef up the transport to rural cellular towers.B ut cellular connections, anything wireless data wise has this curve where it says the further you are away from the tower, that speeds drop up really fast. And when you go to rural America it's not -- you know, this, these speeds that they're talking about delivering only work for our first mile or two. And it's not very hard to be three or four or five or six miles from the nearest cellular tower and they're not going to build thousands of new cellular towers. And so all these folks that are supposedly going to be getting these fast speeds will get three megabits and they'll get it. And they'll get on a very expensive $80 a month, cellular plan with a data cap on it. Uh, and just, you know, like they do today. It's not going to make their lives all that much better. Now, if you're really close to the cell tower and that technology might get 15 megabits, that's sort of the best speeds we can do today. That's not going to be very many people. And that's not broadband. Even by the FCC definition, it's not broadband, but in real life, it's not broadband. You can't, you know, I have a 60 megabit connection home with three people on it and we crowd each other out. It's pretty amazing how we have changed how much broadband we need. And the reason for that is we do simultaneous things today. It's not that we have applications that need broadband, it's we're trying to do six of them at the same time, and boy, they interfere with each other like crazy and it doesn't work so
Christopher Mitchell:: Well, the vision of the Connect America fund was something that I really supported. The idea being that, rather than envisioning an endless supply of yearly subsidies for operating expenses, the vision was that we would do one time larger capital expenditures. And we would not need to keep subsidizing them. But it looks to me like the way it's been implemented is actually just that now rather than doing yearly subsidies were going to do subsidies every decade because there no way. We're not going to give more money to upgrade those people that are getting three megabits. They're going to need something better.
Doug Dawson: Yeah, and what's going to happen is the phone companies have all made it clear when that money runs out, they're not doing anymore. They are not doing any more work on rural copper. We just gave billions of dollars to beef up rural copper, which was already old bad and not adequate. We've got to a point where people now in rural areas don't want better broadband, they're demanding better broadband, so the politicians and those areas will not be able to withstand that political pressure. So we're going to have to do it all over again. That money could have seeded gigantic fiber builds. If they would've just put it open to auction, all sorts of folks would have come in and built fiber instead of beefing up the copper. It would have not solved the whole footprint, but we have, might've served, solved 25 percent of it with fiber so that we -- So we ended up making no permanent solutions. Um, you know, I'm, you know -- I just said AT&T and he's going to use cellular. You know, Frontier and CenturyLink are just beefing up their DSL on, and on really old inadequate lines. That's even worse than what AT&T is doing. So --
Christopher Mitchell:: Do you have any, any quick takes on discussions about sort of CenturyLink, and Frontier, Windstream, not having a viable path forward and us having a sudden moment in the near future where they're just not serving where they just give up and walk away from rural areas.
Doug Dawson: Oh, I just actually wrote a blog. I don't remember when they're published exactly, but it says CenturyLink has basically announced they're backing out of the residential business. They are no longer going to support residential broadband, which means they're going to let rural copper go. Uh, they are going to probably not build any more fiber to the home because the company just got basically taken over by Level 3 management and they're going to enter, they're going to focus on enterprise. So that company is going to be out of the business, which means we're going to see the same thing we saw. You want a good example of that? Uh, Verizon tried to sell West Virginia property offer almost 15 years and during that whole time they made zero investment in the state because they were always this close to getting the buyer right. So that's 15 years where they completely neglected the copper. By the time frontier bought it, it was completely a power crap. You know, they're struggling to make it better, but you can't really fix something that's been neglected for that long without keeping it up. They're going to stop doing any repairs in rural areas. They're -- all these companies are going to cut back their employees. In your state, Cook County, one of the reasons they decided to build a fiber network is CenturyLink, had one technician for the entire county and entire county. So if you called with a phone problem or a data problem, it could be three weeks before he ever even got out to see you. And normally, and then he would go "Gee, there's really nothing I can do for you because that takes capital money and we don't have any money to do that." That's what we're going to see in rural areas is no response for problems. Uh, so yeah. So even if you get that nice 15 Mbps DSL today, the first time you have problem, you may be done forever and they may never fix it.
Christopher Mitchell:: So let's finish up with a discussion briefly about net neutrality. I'm curious how your different customers and clients responded. I know that there was a division among municipalities, none of whom, as far as I can tell, really have any intention of violating net neutrality. but there was a mixed response as to whether or not they supported the FCC taking action on it.
Doug Dawson: I don't have a client who violates net neutrality and little guys really can't. You don't have the market power. But you say that, but they could because what we've always seen -- so you know the way net neutrality is going to get violated is, you know, AT&T and the big guys are going to mine, data mine their customers and they're getting all the same stuff that everyone's freaking out about Facebook for. They're already doing it quietly behind the scenes. You know, AT&T has a way better look at what you do than, than Facebook does. AT&T sees all of your emails and they see all of your web searches. They know everything about you. Right? And so what I suspect is going to happen is there's going to be a group of marketing guys pop up who will pay these little guys x number dollars per customer for their data. And at that point some of them may decide to get into the business. They may say, well, heck, I would love to get $8 per customer per year. All I have to do is give them my, my url search data. I'm not so sure that some of these guys won't violate net neutrality. You know, money is a strong incentive. Right now none of them do because they don't have the market power to do it. They don't. And they don't have the technical know. They don't know how to do this stuff. And they can't mind their data's customer. They -- but, uh, but I'm not so sure that they won't in the long run. I think municipalities are the safest bet, you know, they will not violate their customers trust. But I think a lot of the commercial guys very well might. So I think it's worth noting for people that are very technical.
Christopher Mitchell:: Um, net neutrality is, is separate in some ways from the privacy issues, but in the way that it's worth talking about in the way that every American really thinks about it, they're all wrapped up in the -- [interrupted] that's exactly what you're getting the broadband service that you need and want.
Doug Dawson: Right. Right. I mean at the other aspect is, limiting web searches and you know, fast lane slowing down stuff, the little guys will probably never do that and that's just bad customer service because that's their one competitive advantage -- because they're all competing against the bigger guys almost always. So. So I think that's the one area they won't go to. So. But, you know, we'll see. I think it surprised me there too. So.
Christopher Mitchell:: Sure. I'm curious what you've seen the last few years. In the, in the 2015 order when net neutrality's established. That was also the time when, when the FCC, Tom wheeler led the FCC in overruling North Carolina and Tennessee's barriers against municipal networks, some of the barriers. That lead to a spike, a lot of news stories, a lot of cities considering networks, many more feasibility studies than we'd seen in the past, we've not yet seen a, you know, a doubling. We've seen an increase of cities getting into this business. Recently with the net neutrality repeal. We're seeing again, tremendous interest from cities and activists that are getting organized. Is this space going to start really growing much more rapidly?
Doug Dawson: It's actually grown a lot more rapidly than you think. Because where all the growth is as a public private partnerships. Cities are going, "Look, I will kick in some money to help you build." And then an ISP is doing the actual construction, running the networks and you don't think of those as municipal projects so much and a lot of them are very quiet and they don't make big press. But that's where we're seeing all the growth. And so, so I think, you know, most cities don't really want to be an ISP. If they're not already with our own power company or something where they're used to a technical interface with customers, they're still scared to death of that. As well they should be. I think there's actually more interest than I've ever seen, but probably three quarters of those are headed towards public private partnerships. And so, you know, they don't really care what the model is to get broadband to their community and you know, they don't -- Cities don't feel like they have to be the one to drive it. They just want people to get the speeds they want, and they want the ISP to be someone responsible -- and they would like -- and they would like that to be someone local, which is not always possible. But they would love the profit's not to run into some big city, but at this point cities go, "I need broadband than anything that gets me that is acceptable." They there are a lot less picky than they were five years.
Christopher Mitchell:: Are you seeing the public private partnerships getting executed? Because that's. I agree with you, there's been a tremendous interest in that, um, but you know, Axia exited the US market recently. SiFi is now working with at least two cities, um, possibly more in the near future. But there was five years where they were talking with many cities and there was all this talk of public private partnerships but they weren't executed.
Doug Dawson: The answer is yes, those guys were going after fairly big towns. And so that's never, that has not gone very far because, you know, when you walk into a town where it's a $50 million investment or $100 million investment, there's not many players in that market. So what we're seeing, though, is public private partnerships that are out, you know, in a lake front in Minnesota and a little mountain town in Colorado. And they're there and they're working together to bring broadband to 100 people or 500 people or a thousand people. And there's a lot of those going.
Christopher Mitchell:: Okay.
Doug Dawson: So very slowly. And they're mostly working with either, um, you know, independent telephone companies who are doing a tremendous amount of this expansion out of their own pocket. Uh, there's some very good wireless companies who are doing it with the right technology, are doing a good job. And there's, there's a few independent guys who are just on, and I have a client in Kansas who's out of his own pocket, has built 5 or 600 miles of fiber to the home in the most rural places. You can't imagine that would make a good business plan. But he's making a really good go at it. Uh, so, you know, very slowly they're picking it off. Unfortunately, when you look at the map of who doesn't have it and you plot all these out, it's still doesn't color very much of it from, you know, not having fiber to fiber. But, but that's where the growth is. Unfortunately. I don't know that there's going to be an easy answer to the towns that need a $50 or $100 million investment because that's hard money to raise for anybody in. those companies have tried it. They, they really didn't succeed. That sound. I don't hear a lot of new ones coming along. We'll see.
Christopher Mitchell:: Well, thanks for your insights today. It's been a really good conversation, getting some candid answers to some of these things where we all see just press releases regurgitated in the press, unfortunately.
Doug Dawson: Yeah. Well that's 5G for you. that's a if that's technology by press release.
Christopher Mitchell:: Right. Thank you so much.
Doug Dawson: All right, you're welcome.
Lisa Gonzalez: That was Doug Dawson from CCG Consulting. We have transcripts for this and other podcasts available at MuniNetworks.org/broadbandbits. Email us podcast@MuniNetworks.org. With your ideas for the show, follow Chris on Twitter. His handle is @CommunityNets. You can also follow MuniNetworks.org stories on Twitter. The handle is at MuniNetworks. Subscribe to this podcast and the other ILSR podcasts, Building Local Power and the Local Energy Rules Podcast. You can access them on Apple Podcasts, Stitcher, or wherever else you get your podcasts. Never miss out on our original research. Subscribe to our monthly newsletter at ILSR.org. Thanks to Arnie Huseby for the song "Warm Duck Shuffle" licensed through Creative Commons, and thanks for listening to episode 306 of the Community Broadband Bits Podcast.
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