Transcript: Community Broadband Bits Episode 86

Thanks to Jeff Hoel for providing the transcript for episode 86 of the Community Broadband Bits podcast with Bruce Patterson on the network in Ammon, Idaho. Listen to this episode here.

00:06:

Bruce Patterson:  We build the road.  And we let anybody that wants to use them use them.  So, the commercial enterprises on those roads might FedEx, UPS, or the U.S. Postal Service.  We are not those entities.  We are the entity that builds and maintains the roads.  So we're completely open.

00:23:

Lisa Gonzalez:  Hi, there.  You are again listening to the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance.  This is Lisa Gonzalez.

In this episode, Chris connects with Bruce Patterson.  He's the Technology Director for the City of Ammon, Idaho.  Ammon began by building its network to connect a few municipal facilities.  City leaders realized they could save some money, and control internal connections, if they built the network themselves, rather than leasing from a private company.  The open access network now saves public dollars, provides needed connectivity, and even brings in some revenue.  Ammon was one of the many communities that applied for, but did not receive, federal stimulus dollars, under the American Reinvestment and Recovery Act.  The story is compelling, because city leaders united together to pursue their vision and make it a reality.  Today, the network also serves businesses, schools, and libraries.  Ammon hopes to extend the network benefits even farther into the community.  Here are Chris and Bruce, discussing the network in Ammon, Idaho.

01:22:

Chris Mitchell:  Welcome to the Community Broadband Bits Podcast.  I'm Chris Mitchell.  And today, I'm speaking with Bruce Patterson, the City of Ammon Technology Director -- out there in Idaho.  Welcome to the show.

01:35:

Bruce Patterson:  Thank you, Chris.  I appreciate you inviting me.

01:37:

Chris:  Absolutely.  I've been watching Ammon for a long time.  I think you're doing some very interesting things.  You're certainly blazing a trail in Idaho.  Some of the first in the state.  But let's start with a little bit of background, for people who aren't familiar with Ammon.  Where are you located, and what's the community like?

01:57:

Bruce:  Well, we're in the southeast corner of the state of Idaho.  We're about an hour and a half from the west entrance to Yellowstone National Park, and about an hour and a half from the Tetons in the state of Wyoming.  We're a city of about 14,000 -- just over 14,000 -- residents.  And we're primarily a residential community.  We sit just adjacent to the City of Idaho Falls.  And the City of Idaho Falls has a population of some 60,000.  And that's really where most of the businesses reside, and the hospital.  And the major infrastructure and anchor institutions for the area are really over in that community, in the City of Idaho Falls.

02:36:

Chris:  Right.  I was just out there, visiting with you, back in October.  It's a lovely area.  While we were there, you mentioned that, you know, you just cross the invisible border between Idaho Falls and Ammon, and you go from having some pretty decent Internet prospects, as a business, to maybe ones that aren't quite as good.  Can you tell us a little bit about that difference?

03:00:

Bruce:  Yes.  You know, over the years, you read a lot about the digital divide, and you hear a lot of conversation about how that's significant for economic reasons, and for businesses.  But, I think, until you really see a situation like what we faced here in Ammon, it's difficult to understand what impact that connectivity or lack thereof, at a reasonable price, presents for a business that wants to move in.  You know, I appreciate that you said the City of Ammon's a trailblazer.  And I know you're aware that the City of Idaho Falls has an electric utility.  They were very -- they had a very good future vision -- looked down the road.  And they created an electric utility, almost a century ago.  And that electric utility has funded a fiber build.  And they have a business model that allows them to share some of that excess fiber through dark fiber leasing.  And that model has really suited that city very well, as they lease that out to businesses there in the area.  And so, just as an example, the law offices in our area tend to reside within the City of Idaho Falls.  And they use that fiber to interconnect their offices and share files.  And so do many of the medical facilities in the area hospital -- the regional hospital.  So those are just a couple of examples of what we see.  And, of course, as a result of that, connectivity -- broadband connections -- come at a deceased price, and they come at a capacity that, frankly, just wasn't available on our side of the street.

04:30:

Chris:  And so you, as the Technology Director of the city, you were thinking, you know, there's probably something that we either should do or we have to do in order to correct that.  And I'm curious when you started thinking along those lines.

04:45:

Bruce:  My City Council, actually, was looking at economic development for the city of Ammon, and felt that there was a real lack.  And as they looked at the reasons why -- it's not unusual for a business, particularly a large business, when it comes into an area to use an economic development agency.  We have one here -- that they will say, here are our desires, or our requests, you know.  We're willing to build a facility, or we're looking for an existing facility, or offices, that has these capacities.  And oftentimes on that list was a desired bandwidth connection, and certain technical services that would come across the network.  And, quite frankly, we couldn't respond to those.  They would come in, and we just simply did not have the bandwidth capacity -- those types of connections -- to offer, on our side of the street.  And so, we couldn't do it.

So, my City Council actually came to me and said, we need to resolve this problem.  And it was a very, very big challenge.  We actually started trying to figure this out way back in about 2006-2007.  We started trying to figure out how we could overcome this barrier.

05:53:

Chris:  You don't have a municipal electric utility.  You're part of the Information Services type department.  You do that sort of function for the city.  And so, there's not as many examples of people in your position taking a position that we need to build a fiber network.

06:09:

Bruce:  You're exactly right.  At that point in time -- 2006-2007 -- I was inside IT.  So my Council came to me and said, we want you to look into this, find a way to deal with it, present some kind of successful business model -- a workable model that will allow us to do something similar, and provide higher-speed connections at an affordable rate.  And so, that was an assignment I had.  It was pretty daunting.  And a number of times, I remember having to report to my City Council and say, here are the facts.  And it was a very big challenge to try and figure out how we could even begin to move the needle on this.

06:50:

Chris:  And so, how did you move the needle?

06:52:

Bruce:  Most everyone's going to remember that when the Recovery Act was passed, there were a lot of financial incentives to do infrastructure improvements.  And some of those monies were made available to municipalities, private agencies, anybody who really wanted to put fiber into place to improve broadband connectivity -- there was money available.  And so, the City of Ammon became aware of that.  I became aware of that.  And we began to explore that option.  And we made applications for grant moneys, to try and put fiber into our city footprint.

So we did a business model -- that was part of the requirement to make the application.  And another part of the requirement was a match of a certain dollar amount.  And so we had to identify funds that we could appropriately use for that, and set those aside, in hopes of receiving the grant.

07:51:

Chris:  And was this part of the broadband stimulus specifically that you were applying for?

07:55:

Bruce:  Yes, it was.

07:56:

Chris:  And so, what happened with those?  Did you get any of those grants?

08:00:

Bruce:  We did not receive any grant money.  And, at that point in time, City Council took a look at the money that we had set aside.  And we had just finished construction on a new city facility, which we needed a better connection to, so that we could provide technical services that were needed at both locations within our city.  And so, we actually went out and obtained pricing from the current providers, to try and get just a 100-meg connection between those two buildings.

And the response that we got back from the incumbent providers was interesting.

08:38:

Chris:  So, what exactly was interesting about these bids?

08:43:

Bruce:  Well, I think, for anybody that goes to try and obtain these types of connections, which really -- you know, our desire was not to have a public Internet connection to tie these two buildings together, but really what we wanted was a private, special circuit, that would just connect our City Hall with our Public Works Operations facility.

09:02:

Chris:  Right.  And that's just incredibly common, I mean, whether you're a business with multiple locations or, you know, a city of any size.  You almost always have facilities that you just want to communicate with each other.  That you don't want to go over the open Internet.  You don't necessarily even need to get Internet access in there.  So that's just -- I mean, people don't always realize that that's a very common use.

09:23:

Bruce:  That's correct.  And, in fact, that -- running it across the public Internet, particularly when we're talking about pieces of infrastructure that are owned and operated by the city -- for example, a well site or a sewer lift station -- those sites have technical equipment that are monitoring, that give us reports that are necessary to tell us what our flows are, how the equipment is operating, and alert us to any risks.  Or, worse yet, if we have an outage, we get notified in time to be able to respond to that in a way that mitigates any problem for the public.  The complication of trying to do those kinds of things across the Internet is extreme.  And it introduces a whole nuther layer of complexity to those operations, to manage that -- through what you need to do to secure it across the Internet, and make sure that connection is stable and stays up.  And so we really wanted a private connection between these buildings.

For anybody that asks for those type of connections, what you'll typically find is, you get presented with an up-front cost -- a non-recurring charge -- and then a monthly cost.  And I think what we found to be the most interesting about the quote that we received back -- we have two incumbent providers that would be capable of providing that connection -- one said they could not do that connection and were not interested in providing it; the other one did give us a quote back, and the price for the non-recurring charge was the cost to place fiber between these two facilities.  So, as we looked at that initial charge, it appeared to us that whether we paid it to them -- had them build and own that line -- or whether we put it in ourselves, that up-front cost was the same.  So, I think that explains why our decision was, we would simply do it ourselves.

And so, what we did is, we tapped the money that we had set aside for the match of the grants we had applied for, and we put our first fiber line in, between the two buildings that we owned.

11:25:

Chris:  And how did you end up proceeding from there?  I seem to recall that you were looking for opportunities when you had other capital projects to get fiber in the ground at a low incremental cost.

11:36:

Bruce:  That particular job, or project, in putting that fiber in the ground was so successful, and we felt that it went so well, that our water department came to us and said, what about all of these outside connections that we're using to manage the wells?  In other words, at that point in time --  We have ten well sites, all locations where we have well head and pumps that feed the residents of our city.  And they're scattered throughout the city, and they're actually set up in a way that they feed the different subdivisions and neighborhoods.  So, at that point in time, we were paying for multiple Internet connections to create, across the public Internet, private connections to these sites.  And, as I mentioned, there was specific equipment at each location, and the level of complexity to keep that up and running was quite high.  And, for those type of commercial connections, in our area, to get 5 meg -- 5-meg connections to those sites -- we were
paying $100 to #200 per site.  So, if you figure out what we were paying per month to maintain all of those sites, that tells you what we were paying per month.  So, the interest on the part of our water department was to take all of these things in-house, just pay one time, to put the infrastructure in, and the expectation is that that fiber would pay for itself over the period of time.

12:58:

Chris:  And so, if I remember correctly, what you ended up doing was that the water department paid for the fiber, you put in more fiber than would be necessary for just their uses, and they don't ever have to pay for monitoring those wells, and things like that.  Is that right?

13:14:

Bruce:  That is absolutely correct.  That's exactly the model.  Because there was discussion about ownership and maintenance and operation.  And, quite frankly, the water department was not interested in owning, operating, and being responsible to maintain the fiber.  It just -- it introduced a whole nuther responsibility for them, that they were not interested in.  In addition, it seemed to make sense that the wastewater or the sewer department could use the same fiber to reach their sewer lift stations.  And the Parks and Recreation Department had a city pool, and other sites, with equipment that was responsible for landscape irrigation and other things, that they would like to talk to.  Well, it seemed to simply make sense for the city to start to put this infrastructure out.  And, when it could be done at a cost that made sense, and presented a savings or presented other benefits to the city to put that fiber in, then that cost would be shared by
 those departments.  And, in return, they would receive that connectivity for -- into the future, at no charge.  So, they paid one up-front, non-recurring charge, just to assist in putting the fiber in place, and then the city as a whole just operates and maintains it for the benefit of all the departments.

14:28:

Chris:  And what kind of operations cost is there?  I mean, is it...?

14:31:

Bruce:  There's a little bit of additional cost, because you now have fiber out there in the public right-of-way.  All of our fiber is below ground.  And so, there is some additional cost, in that we have locates.  We do have the same issues that anybody has that has infrastructure in the ground.  And, at times, that fiber does get hit, and different things happen.  Those did present some additional costs.  But, overall, when you think about it, all of those connections were my responsibility to operate anyway.  And I just told you that I reduced the level of complexity.  So the time I was spending maintaining those, and keeping all those systems operational, has actually been reduced.

15:10:

Chris:  So it's really just a matter of personnel costs, aside from -- I mean, it's pretty minor, in terms of a budget.  It's probably a few thousand dollars, either a month or a year, even.  For the maintenance-type things -- repairing cuts, and doing the locates, I'm guessing.  Your costs are quite low, on an ongoing basis.

15:31:

Bruce:  Extremely low.  Because we were already doing locates.  We already have to go out and repair lines when they get hit.  And that's true for sewer and water.  We already go out and repair the road when there are issues.  So it becomes very difficult to measure the exact cost, because those are very tiny incremental things that are added to responsibilities the city already has.  So it really ends up being a nice fit.  And I think what it does is, it presents a community-owned piece of infrastructure that can be shared by anybody that wants to use it.

So that led to our next evolution, which was -- since we have this excess capacity, how can we open it up for the community, since, really, they own it.  And so we started to work on that.

16:13:

Chris:  Right.  And as we actually transition into that, I just wanted to give a shout out to your Public Works Director, who I met while we were there.  Because I've run into people from other communities who are in a position like yours, who had the same ideas, and found that the public works director was an insurmountable object.  The public works director saw NO benefit for his department to get involved, or to let anyone muck around underneath his streets -- or her streets, however the case may be.  But your Public Works Director was just fine with it, and saw a community benefit, and has worked with you.  So, it's worth calling out and noting.

16:48:

Bruce:  You're exactly right.  Ray Ellis is our Public Works Director.  Couldn't have done anything we've done without him.  And he is very gracious and accommodating.  And he views what we do as a key partnership for him.  We're partners.  And my success is his success, and vice versa.  So, it really has turned out to be a symbiotic relationship.  And I think it benefits the community, to have that type of relationship in amongst the departments of the city.

17:16:

Chris:  And so, what did you do, then, to make the community benefit of the fiber go beyond just the city departments themselves?

17:23:

Bruce:  When we ran the fiber, we increased the count beyond what we knew we would need.  And, frankly, that would make sense for anyone in the position we were in.  Because it's really pennies -- literally pennies on the dollar -- to just add another 12, 24, or 48 fibers to the necessary count that we had.  And the capacity for each of those fibers is tremendous.

So, what we found was, there are middle-mile providers that provide connectivity services and backhaul for cell sites and other wireless providers.  So, for an example, Verizon or AT&T, who are two of our biggest cell providers, have cell towers within the city limits.  And as they roll out 4G technologies, they need to increase the bandwidth capacity that is available at that tower dramatically.  And so, what we did is, we provided -- some of these middle-mile providers that perform backhaul for companies like Verizon and AT&T -- dark fiber to those cell site locations, which they lease from us on a monthly basis.  That was the start of revenue into our broadband department.  So, now, not only are we reducing our inside costs, but we actually some revenue coming in.  And so it needs to stand on its own here, so that we can continue to provide that connectivity to those departments as we committed to them at no cost.

18:52:

Chris:  Where do you see this going next?  You have -- you're connecting these towers now.  And presumably you're going to be able to continue to add to your fiber footprint over time.  So, what do you think you'll be doing next?

19:05:

Bruce:  Well, this year, we were able to turn up four of our local high schools on four 10-gig connections.  And, frankly, they came to me and they described what they'd like to do, and they started talking about 10 gig.  And I was just astounded at the type of work that the school district is doing, in terms of looking at, bring your own devices for the students.  At their surveillance systems, that they're upgrading as a result of what we see happening in this country with cameras.  And how they're trying to manage those.  And then, in addition, you have other communications -- intercoms and phones.  And so, they were interested, again, in their case, not in Internet connections but private connections between those schools.  And they were looking for dramatic capacity increases, as they looked at trying to have each student bring their own device to school and start to use that as part of the curriculum.

So, this year, we were able to provide those four 10-gig circuits, at a dramatic price decrease from what any of the incumbent providers could do.  And so we felt that that was a good match for us -- to serve an anchor institution like that.  And, again, the fiber is owned by the community.  And using it that way really benefits them.

20:21:

Chris:  That's incredible: 10 gigs to the schools is wonderful.  Obviously, there's a lot of schools that are much larger, I expect, that are dying to get a gig, even.  So you're ahead of the game there.  What are you going to be able to do, in terms of maybe eventually connecting other businesses or residents in the community?

20:40:

Bruce:  So, we're connecting businesses already.  That's done on a case by case basis.  Our model is really quite simple.  What happens is, a business would want access to our fiber, and they would come to us and ask us for a price to extend our -- a fiber to their location -- and we would give them that price.  The business, because they own that fiber, bears the cost of that extension.  And once that's put in place, we simply allow them to take that fiber, and we will plug it into whatever service or whatever other location they would like.  So, primarily what we're seeing is banks, financial institutions, other major institutions within the city coming on board.

It's not unusual for a business, when it comes into an area, to put out a request for locations that have certain types of services.  Ammon is now able to respond to those requests and say, yes, we have connectivity here.  We can provide you with whatever bandwidth you would like at a reasonable price.  So, while it's too early in the game for us to say how much impact this has had, because it's just been up and operational for just over a year, we are at least happy to respond to those requests.

21:48:

Chris:  And what if I'm a business that is right next to a business that's taken service from you?  When you put in the first business' fiber that is owned by that business, would a neighboring business benefit from that at all?  Did you put in extra fiber when you made that investment?

22:06:

Bruce:  Every step we take to extend our system increases our footprint, and it reduces the cost.  The city is not in a position to, overall, build the system and extend it to every address, at this point.  Although that is on the roadmap.  So, right now, the businesses would bear the cost.  And it would assist a business right next to it, because that would then mean there's fiber available closer to them.  And they could, more than likely, partner up with the business right next to them to share that cost, if that's what they'd like to do.  And we've seen that happen in some cases as well.

22:37:

Chris:  That's a really good model.  And we've seen it elsewhere as well.  I mean, you know, Santa Monica does a similar thing with their expanding the network to businesses.  Is there anything else that we should know about Ammon and your approach to building the network?

22:50:

Bruce:  We do intend to go to every address within the city.  That's the goal of the City of Ammon.  That's the expressed goal of City Council.  We publicly made that clear.

23:00:

Chris:  You've been operating an "open access" network.  And so, when you say, go to every address, what you really have in mind is building this infrastructure out, and allowing different service providers to deliver service to any address in your community.

23:12:

Bruce:  That is a very important point.  The City of Ammon provides no service -- no end service.  In other words, we're not an Internet provider.  We can't give you a phone.  We can't give you channels or entertainment.  What we can give you is a connection to other providers who provide that service.  So the best way to illustrate that is the same example we hear by open access providers -- which is, we build the road, and we let anybody that wants to use them use them.  So, the commercial enterprises on those roads might be FedEx, UPS, or the U.S. Postal Service.  We are not those entities.  We are the entity that builds and maintains the roads.  So we're completely open.

Some of our greatest barriers really deal with policy.  What we mean when we say that is, there isn't clarity for us on how it is that we could go to every address and provide a fiber to that particular home or business.  And we'd like to figure out what that model is, and make sure that within our state's constitution we can do that.  That's our focus right now.  What we've done stands on its own, and it provides services to our community.  But we'd like to try and determine if our community desires more service.  Would our community like a fiber to each home?  And there appears to be expressed interest in seeing that get done.  And so our next question that we need to address is, how can we do that?  And that's what we're focused on right now.

24:40:

Chris:  Well, that's wonderful.  Thank you so much for coming on the show.

24:43:

Bruce:  Thank you for having me.  I appreciate it very much, Chris.

24:47:

Lisa:  Learn more about the network in Ammon at muninetworks.org.  We look forward to bringing more from Idaho as the Ammon community continues to explore its public asset.

Feel free to e-mail us with questions or ideas for the show.  Write to podcast@muninetworks.org.  Follow us on Twitter.  Our handle is @communitynets.  The show was released on February 18th, 2014.  We want to thank the group Fit and the Conniptions for their song, "Bless Your Heart," licensed using Creative Commons.  And thank you again for listening to the Community Broadband Bits Podcast.  Have a great day!