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Transcript: Community Broadband Bits Episode 389
This is the transcript for episode 389 of the Community Broadband Bits podcast. In this episode, Christopher speaks with Mayor Gary Fuller from Opelika, Alabama, about the city's decision to privatize its broadband network in order to serve more people. Listen to the episode, or read the transcript below.
Gary Fuller: At&t has a very big stick and some of these areas in North Auburn that we wanted to serve, they didn't particularly want to serve them, but they didn't want Opelika to serve them either and we were willing and able to do that.
Lisa Gonzalez: Welcome to episode 389 of the community broadband bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. The last time Mayor Gary Fuller from Opelika, Alabama was on the podcast was 2013. He came on to talk about his city's exciting new designation as the state's first gigabit community. A lot has happened since then. They deployed to the entire city and sought to expand to nearby Auburn but Alabama state restrictions prevented them from serving the city just a few miles away. After multiple attempts to change the state law, all flooded by dozens of lobbyists from incumbent At&t, community leaders and Opelika realized that the best option was to privatized the network, which they did in 2018. Mayor Fuller is back on the show this week and though you don't hear them in the interview, he's accompanied by Derek Lee, director of Opelika power services and Joey Motley, city administrator, the Mayor who spearheaded the project and led the community shares the Opelika story. He describes why the town decided they needed to bring some Internet access, competition to town, the challenges they faced, and the details behind the sale. For more on Opelika story go back to podcast episode 40 from April of 2013 and check out our coverage at muninetworks.org. Now here's Christopher talking with mayor Gary Fuller from Opelika, Alabama.
Christopher Mitchell: Welcome to another episode of the community broadband bits podcast. I'm Chris Mitchell at the Institute for Local Self-Reliance up in a rather chilly Minneapolis this morning and I'm speaking with Mayor Fuller from Opelika, Alabama. Welcome back to the show, Mayor Fuller.
Gary Fuller: Hey, great to be with you, Chris. Thanks for having me.
Christopher Mitchell: Yeah, I think you were on seven years ago when you were working on this project, you came on with the folks that were advising you on it and we had a wonderful discussion and now I'm looking to close the loop and learn about everything that's happened in between. But why don't, why don't we start by just for folks who haven't been to Opelika aren't familiar with it, you know, I guess I should note that we're about to be rivals and I think when this show airs, we will learn whether Auburn beat Minnesota or if Minnesota pulls the upset in the new year's day bowl game. But, as I recall, you're an Alabama fan anyway, so probably not that big of a deal.
Gary Fuller: Yeah, I am an Alabama fan, but let me tell you what I'll be pulling for Auburn when they play Minnesota. And the golden gophers are not accustomed to SCC style football and Auburn's pretty good. Obviously they beat Alabama. And, so we expect it to be a great game between two great schools with Minnesota and with Auburn university.
Christopher Mitchell: That's right. And as people are listening now, they'll know that hopefully, it was a good game and not a blow out. So, but tell us a little bit more so Opelika is right next to Auburn but for people who aren't aware how big is it and what sort of stuff do y'all do down there?
Gary Fuller: There are two major cities in Lake County, Opelika and Auburn comprise a metropolitan statistical reporting area, Metro. And there's about 165,000 in the Metro city of Opelika has, we think the new census will show us a little over 30,000, city of Auburn has about 60,000 and they have 25,000 students at Auburn university and some of those are candidate in the census and some are not. We are next door to each other, our Western city limits and Auburn's eastern city limits touch. We do compete with one another in sports high school sports in particular but the two communities are really joined at the hip. We have folks that live in Opelika that work in Auburn and vice versa. Folks that live in Auburn that shop in Opelika and vice versa but Aurburn university is the largest employer in Lake county. And then the second largest employer is East Alabama medical center, which is located in Opelika. Opelika is the county seat of Lake County. We're located in East central Alabama. We're about 30 minutes from Columbus, Georgia and Fort Benning, we're an hour and 15 minutes from Atlanta's Hartsfield airport. We're less than an hour to the state Capitol in Montgomery so, that's where we're, where we're located. And, our geographics, Opelika is a town that is known as an old railroad town because back in the old days, there were two railroad lines. We still have two railroad lines, one that runs east-west, the other that runs north-south, and they intersect in Opelika and back in the days of cotton and that type of agriculture, Opelika was really a bustling community because of the railroad. And, we still have the railroad, but we've advanced, since then and of course a lot of our goods and services now are transported by interstate highway, which I85 runs through Opelika and we have five exits to interstate 85.
Christopher Mitchell: In 2012 then you, to fast forward from the railroads to the modern commerce, you built the Citywide fiber network, which at the time you were the first gigabit city in Alabama. So tell me a little bit more about why you got into that business through your municipal electric utility.
Gary Fuller: And it is important, Chris, for folks to understand that the citizens of Opelika have owned Opelika power for over a hundred years. And that has been a wonderful thing, not only for our citizens, but for business and for commerce to have public power. And those rates are substantially less than the investor owned utilities but we add one Internet cable TV provider at that time in Opelika and that was charter, which is now known as spectrum. They had then the absolute worst customer service in America and I called him out on this a number of times. Apparently, they were not very embarrassed because they didn't do anything about it to make it better. We tried to recruit someone to come in and compete with charter. City of Auburn had the same issue that Opelika had. They had one provider and that being charter. Predatory pricing if you lived in Montgomery or Columbus, Georgia, which both had charter, but they also had other providers. The rates were substantially lower than they were in Opelika and in Auburn so the first thing we wanted to do was create competition for charter. Then the other thing that we wanted to do was to be able to fully deploy our smart grid and be able to have real time communications with the meters on the side of your house or at your business. So you need fiber in order to do that and it also is a great help in the event of an outage on being able to restore service to those power customers. So we wanted to do two things, create competition for charter, and then to fully deploy smart grid. So we embarked upon this adventure of building a fiber network. For a long time. I thought it was about 400 miles. Derek Lee tells me it's actually about 350 miles but we wired the entire corporate limits of Opelika without regard to there being 30 households per mile. It didn't matter if they were 10 or 5 or 1. We wired the entire city and we didn't cherry pick the affluent neighborhood. We went to all part of Opelika with fiber so now prior to doing this, we had a referendum by the city council because the telecom law that was written in Alabama back in 2000 said that someone could petition to have a referendum. So before charter or anyone else, petition for a referendum, we petitioned ourselves, in fact, Derek Lee circulated the petition. I was one of the first to sign it. I think we hadn't required signatures within 24 hours calling for a referendum. And we wanted the people to be involved in making the decision to invest the kind of money that we were going to invest. And of course, the support was overwhelming. Now, we had some naysayers and we suspect that they were encouraged by charter or the telecommunications business in Alabama to oppose it and they opposed it saying no to smart grid, that was a bad thing. We had a public hearing and folks came and talked, and we had one lady that said, I don't know why y'all doing this smart meter — do you want to look inside my bedroom? But I explained to the woman that made her on the side of her house was going to do the same thing that a meter had always done and that's to measure her consumption so we can send her a bill. The advantage of the smart meter is for us to have real time communications with it so we can turn the meter on or off without having to dispatch personnel to do that. And then in the event of an outage to be able to get it back on, so the citizens approved it and then that's when we embarked on building the fiber system. And then, we also built a new facility for Opelika power services, which included a head end building so we did all that at about the same time.
Christopher Mitchell: And much of much of this story will sound familiar to listeners of the show who've heard many cities that have gone through similar things but what makes use a bit different is how you ended up in that last year in 20, well, technically in 2018 as we're airing this as our first show of 2020. You decided to sell the network to Point broadband, a private company. So, we'll come back and talk about the intervening years a bit and your experiences but I'm curious what led you to decide to prioritize the fiber optic telecommunication services.
Gary Fuller: We, from the get go knew that we wanted to expand our territory and that we wanted to go beyond the Opelika corporate limits and in order to do that to state law that was written back in 2000 said that we could only serve the corporate limits of the city of Opelika. We had people in Auburn right across the street from home, in Opelika that we could have them hooked up within an hour or so to our network, but we were not allowed to go beyond our city limits. So we, Senator Tom Watley, we have 30 state senators brought it, brought a bill to the legislature in 2015, we cannot get it out of committee. He brought the same bill in 2016 we could not get it out of committee in 2017, the Senator Watley brought a bill and representative Joe Laverne and the house, Alabama house, we could not get either one out of committee for a boat on the floor. In 2017 when we thought we had the best chance, At&t hired, according to the reliable sources, they hired 26 lobbyists to work against little old Opelika. And I understand that they invested something around a million dollars to make sure that we were not successful. At&t has a very big stick and now some of these areas in North Auburn that we wanted to serve, they didn't particularly want to serve them, but they didn't want Opelika to serve them either. And we were willing and able to do that. So after we lost that battle in 2017, we waved a white flag and said we're not ever going to be able to get out of these handcuffs that we're under that really restricted our ability to expand our territory. So that's when we started looking to try to do something different.
Christopher Mitchell: And mayor Fuller, I just want to jump in cause I have a quote I wanted to share a from state Senator Tom Watley who, I think is worth noting is a Republican, a lot of your state, obviously Republican. And so, this isn't something, as partisan, this is really about that power of At&t but one of the things that he said in 2017 was, "I 100% support private industry to supply these services, but private companies have made business decisions not to serve part of my district. When that happens, I'm not going to tell those areas that they need to accept it. They need to do what they need to do to get serviced. The Opelika Internet bill would allow that." And so like you said, he was a real champion for you and the rest of the legislature decided not to follow his lead on that unfortunately so I wanted to record that because we're seeing these fights in a lot of different legislatures. So, like you said, you had to go in a, in a different direction. You decided it was not worth pursuing at the legislature. So, what did you do next?
Gary Fuller: We started thinking Derek was very much involved in this. We had a company approaches and then we had another company approaches and the second one was serious about wanting to do something and then that's when we began the negotiations talking about how we could conceivably make this work. And it probably took six or seven months, you know, to work this out, we had an investment of course in money where we had borrowed some money from regions bank and then we also had loaned ourselves some money. By the way, we kept all of the funds separate between the power — the power company was not subsidizing the telecom project. And so then that created some bookkeeping challenges, you know, in order to do that. But we owe ourselves about 8 million, as you probably know, Chris, when Point broadband purchased us, it was 14.175 in cash. We had regions about $13 and a half million, which we paid them off. And then, of course, we have an agreement with point that beginning on the 25th month that they will begin remitting three and a half percent of their gross, this generated from the Opelika back to the city of Opelika and we think over a 10 year period that should come very close, maybe even exceed the $8 million that we still owe ourselves.
Christopher Mitchell: Before you decided to sell it, it looked to me, I mean I saw an article that you had about 3,700 customers, about five in. To me, I'm guessing that's probably around 35% market share or close to it given to your population that's right on path. So it didn't look to me like you were financially struggling in terms of even being limited in your service territory. I'm sure that that you were still, it was a headache and you still had to figure out how to keep expanding, but it didn't look to me like you were in trouble.
Gary Fuller: We felt very good about what we were doing. I tell you one thing that we discovered, it didn't take very long. In order for us to change our rate, we had to bring that to the Opelika city council. We don't have a separate power board or anything, our governing body is the city council. And if we wanted to change our rate packages, then not only did we have to bring it to the city council, but we had notified 30 days in advance At&t, Charter, Wow, Dish network, DirectTV that this was going to be an agenda item at the Opelika city council meeting on whatever the date and time to give them an opportunity to attend and voice whatever they wanted to voice.
Christopher Mitchell: To cause trouble.
Gary Fuller: Oh yeah, of course they don't have to give us 30 days notice if they going to do something. They just decide today that they're going to make a change and they do it tomorrow. But we didn't have that flexibility, which was a big handicap, plus we couldn't incentivize salespeople very easily or we couldn't incentivize customers because of how we're structured with the city council and with the local laws. But yes, to answer your question, we, we were pleased where we were. We wanted, of course, more customers and all I was promoted it every day of that being on OPS one. And, in fact, Joey mildly has ops one. I think most of the city council had it, a lot of city employee had it because it was great service and we had the absolute finest customer service that you can imagine because, we're local people. We see these customers at church or at different functions at the ballparks. In fact, I had a friend tell me the other day that the customer service is not quite as good as it was with Point as it was when we had it. But, I think Point has excellent customer service, but we were just, we really went above and beyond on serving our customers.
Christopher Mitchell: And you have one of my favorite all time quotes. I still use this in my presentation to at times when you actually just cue you but you, you would brag that when you called the local folks, they spoke a certain language and if you want to tell us what language that is, I'd appreciate it.
Gary Fuller: Our folks spoke Southern and they were not in India or Bangladesh. They spoke Southern and so you could communicate and let me tell you what, we're never going to put you on hold for 20 minutes. You'd have to go through 10 menus to get someone that could help you and I think folks appreciate that and I suspect it's true with other providers that are in a similar position that we were in before we sold out in that day, you know, local customer service and the response rate. And you know, Chris, if we had a problem and we couldn't have that customer, that telephone, then we would not hesitate to roll a truck and sometimes that meant rolling a truck on Saturday morning or we had one instance where an older couple lacked of watch on Sunday morning through their computer at the time, the first Baptist church, a worship service, which was streaming a video and they couldn't get it, tried to restore it on Saturday. We rolled a truck on Sunday morning, which required overtime for Iron technician. But you know what, we were able to replace the box o&t on the side of their house and they were able to watch that church service that morning. And of course they thought we were the greatest thing since sliced bread. Probably, took us a few years to recover cost of doing that but that was a good example of the customer service.
Christopher Mitchell: Yes, I think that's a very good example of the importance of that local customer service and appreciating people's priorities they have in their lives. I'm curious if you can tell us anything else like if someone was to say to you, if I was to say to you right now, was it worth, I mean, I am sure that, you know, Derek Lee's there in the background, director of Opelika power services, Joey Motley the city administrator, in my experience these networks do prove worth it but they take a lot of out of people, you know, nights of stress, difficulties solving, unexpected problems — was all of that worth going through over the years that you did it?
Gary Fuller: Absolutely. We would do it again. We would, of course, lessons learned, we would do a number of things differently, but yes, it absolutely was worth it. And it was great for our community who were Alabama's first gig city, much to the dismay of Huntsville.
Christopher Mitchell: That's right.
Gary Fuller: They have the latest and greatest and Huntsville has a great, great community and a really a shining star in Alabama when it comes to technology. But we probably beat the Huntsville by a year and they use Google to provide their gig of Internet service. We got a lot of publicity out of that and we had folks that have moved to Opelika, especially those that telecommute from home, you know, they could be anywhere as long as they have reliable Internet service. And they moved to Opelika because of the speed of the Internet and the reliability of it. So yes, we would do it again and um, it's been a good thing for us. It was a great thing when we did it. We did it for the right reasons. We had the right motives. And then of course we sold it for the right reasons and that we were unable to compete because of the restrictions by the legislature and the fact that we were never going to be able to beat At&t. They're just too big and they just have too much influence and try as Senator Whatley might and as Representative Lovvorn might we were never gonna win that fight in the Alabama legislature.
Christopher Mitchell: Well, I really appreciate this time. I want to make sure that I give you a chance and also if, Derek or Joey want to, add anything to the conversation, but I really appreciate you sharing your experiences.
Gary Fuller: Oh, one day that that all people, especially in Alabama and in Lake County will have access to broadband and a reliable service such as our citizens and business enjoy Opelika. And, absolutely, we would do it again, differently. And Derek Lee would be a great one if he ever retires from OPS, he can be a great consultant. I'm telling folks have the best to do something like this.
Christopher Mitchell: Right, having lived through it, it's the best experience you can have.
Gary Fuller: We appreciate your interest and I would encourage other municipalities that are doing this to, you know, to keep it up. And we've asked some nice sayers that thought we undersold our product, but we think that we got a fair price for it. And, we think that Point broadband is a great company and that they will be very successful and then their success will mean something to us as we recover our investment in this project.
Christopher Mitchell: Good, well I wish you the best of luck and I'm sure I'll check in and I still hope to make it down there sometime. I want to take my son on a good tour and since I know good folks in all of these places I want to swing through, so.
Gary Fuller: Come, we'd love to have you. And listen, we'll love on you and your boy and he may want to go to school at Auburn or in Alabama.
Christopher Mitchell: Maybe, we'll see but I hope you all have have a wonderful holiday and thank you so much for all the time from all three of you.
Gary Fuller: Thank you, Chris.
Lisa Gonzalez: That was Christopher with Mayor Gary Fuller from Opelika, Alabama about the community's fiber optic network and their decision to privatize it. We have transcripts for this and other podcasts available @muninetworks.org/broadbandbits. Email us at email@example.com with your ideas for the show. 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 any where you get your podcasts. You can also catch the latest important research from all of our initiatives if you subscribe to our monthly newsletter at www.ilsr.org. While you're there, please take a moment to donate. Your support in any amount will help keep us going. Thank you to Arne Huseby for the song Warm Duck Shuffle licensed through creative commons. This was episode 389 of the community broadband bits podcast.Thanks for listening.
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