In early November, Founder and President from The Broadband Group, Tom Reiman, appeared on Fox Business to discuss partnership opportunities that may indicate a shift in perspective.

Strange Distruption

Reiman discussed the recently announced partnership between CenturyLink and the city of Springfield, Missouri, where the national company has decided to work with the municipal utility. The ISP and the utility will expand the publicly owned fiber infrastructure and CenturyLink will offer services via the network. 

The arrangement is a major shift in the traditional approach that large companies have taken until now: preferring to own and operate their own infrastructure and to serve primarily densely populated regions with high-quality Internet access. Rural areas have typically been forced to rely on, at best, DSL from national companies such as CenturyLink.

Reiman discussed how The Broadband Group reasoned with CenturyLink by highlighting the ease of entry into a market where infrastructure and opportunity already exists. It also became apparent to CenturyLink that the company needs to move forward and improve services in order to stay financially viable in a market in which subscribers’ demands continue to follow innovation.

Watch the Fox Business segment here.

We spoke with Reiman in 2016 about the partnership in Huntsville between the city and Google Fiber, which is similar to the Springfield partnership. He and Stacy Cantrell from Huntsville Utilities described the arrangement in episode 191 of the Community Broadband Bits Podcast.

City Utilities (CU) in Springfield, Missouri, recently announced that over the next four years, they will expand the community’s fiber optic network. CenturyLink will lease dark fiber on the Springfield infrastructure in order to offer Fiber-to-the-Home (FTTH) Internet access to residents and businesses in Springfield and in areas beyond the city. In addition to the great news about this sizeable expansion, experts feel optimistic to see a national ISP working with a pioneering municipal network.

Working with CenturyLink First, Then Others

CU will spend around $120 million to add more than 1,000 fiber miles to their existing 700-mile fiber infrastructure. SpringNet has provided connectivity to local businesses since the late 1990s and has helped spur economic development in Springfield.

CenturyLink, as the first Internet access provider to lease dark fiber on the publicly owned network, and Springfield expect to begin connecting residents and businesses by the spring of 2020. According to CU General Manager Scott Miller, the 15-year arrangement with CenturyLink will fund much of the expansion and rates will not increase for current CU customers.

Miller estimates that CU will complete the expansion within three years. Because the CenturyLink agreement is not exclusive, CU hopes to lease excess capacity to other Internet access companies or businesses. In addition to encouraging options for Springfield, CU wants to deploy more fiber throughout the community to facilitate 5G technology, which requires ample fiber to support high numbers of small cell sites.

The Missouri Senate Jobs, Economic Development and Local Government Committee voted to pass anti-local choice SB 266 on March 18th. This bill, sponsored by Senator Kurt Schaefer, will increase barriers for municipal networks and damage the possibility of highly-effective partnerships with the private sector. Call your Missouri State Senator and let them know you consider this bill anti-competitive, hostile to local interests, and that you will remember their vote at the next election.

The bill was discussed in the same committee earlier this month when a number of private tech firms, industry associations, and utilities groups wrote to members to express their concern with the bill. A dozen entities, including Google, NATOA, and APPA wrote that the provisions in the bill would prevent public private partnerships that improve connectivity at the local level. [See a PDF of the letter here.]

At the time, the committee chose not to vote. Rather than listen to experts, however, they postponed the decision and voted to pass the bill on Wednesday. The only amendment was a provision excluding Kansas City, Springfield, and St. Louis.

The exceptions will help Google and SpringNet but other communities will be shackled. The legislation states that its goal is to encourage innovation but the result is just the opposite by discouraging investment through intimidation.

Columbia is watching the course of this legislation with particular interest. As we reported last fall, the city is considering expanding use of its current fiber resources to spur economic development. This bill could derail their plans and keep Columbia's population limping along with CenturyLink's dismal DSL.  Mid-Missouri Public Radio reported on the bill in February:

SpringNet has spurred economic development in Springfield, serving small businesses but also providing high-speed data to big employers such as Expedia. The network has steadily increased revenue over the years, even though it serves only commercial and public sector customers.

Demand for services has lead to the need to expand so SpringNet is opting to go lean. In 2002, the utility developed SpringNet Underground, a secure data and colocation center. The venture has been successful, says General Manager Scott Miller, but SpringNet sees investing the fiber network paramount and recently sold the facility. Bluebird Network purchased the facility for $8.4 million and will continue to serve the existing customers.

OzarksFirst recently ran the story:

A year has passed since we covered SpringNet in Springfield, Missouri, and its remarkable impact on local businesses and economic development. We recently spoke with SpringNet Director, Todd Murren, and Network Architecture Manager, Todd Christell, to get an update on how the network is progressing.

Demand for SpringNet’s high-speed data services continues to grow steadily. Financial statements for City Utilities of Springfield show the network generated $16.4-million in operating revenue last year against costs of $13.2-million. Better yet, revenues have increased around 3% per year while cost increases are closer to 0.5%. The end result is close to $3 million in annual net income for SpringNet. And all of this comes from a network that only serves commercial and public sector clients because Missouri state law restricts municipal network provision to only “Internet service,” meaning SpringNet cannot offer triple-play packages to compete with incumbent providers.

One of the highlights of SpringNet’s economic development success has been the attraction and retention of travel giant Expedia. After a large national provider failed to deliver on negotiations with the company, SpringNet stepped in to make sure Expedia brought its call center to Springfield. That effort has paid off handsomely for SpringNet and the local community. Expedia now employs close to 900 in the area after announcing in July that it was hiring another 100 employees in Springfield.

Up next for SpringNet is an effort to leverage its fiber infrastructure to create even more jobs. Believing that future job growth will revolve around the advancements enabled by gigabit networks, SpringNet is working with the Mid-America Technology Alliance (MATA) to host a hackathon with partners in Kansas City to explore what is possible between gigabit cities.

On September 11th, we interviewed Todd Murren, Director of SpringNet, for our Community Bradband Bits podcast. Todd told us the story of how travel giant Expedia, chose Springfield, Missouri, as the location for their call center and how SpringNet services them with its high capacity network.

Expedia originally planned on working with a large national carrier to provide connectivity. When it was time to seal the deal, however, promises were broken - the telecommunications company revealed it would not be able to provide the needed bandwidth after all. Expedia almost walked away from Springfield. Thanks to SpringNet, however, and its 350 fiber miles and first class business services, Expedia stayed. SpringNet saved 400 new local jobs.

Todd gave us more examples of how SpringNet has contributed to the local economy as it serves over 200 business clients. In addition to these examples of how SpringNet directly influences the local economy, keep in mind the positive ripple effect. Here a quick list from Todd: