Transcript: Community Broadband Bits Episode 22

Thanks to Jeff Hoel for the transcript of Episode 22 of the Community Broadband Bits Podcast. Jason Grey discusses the history of nDanville and how the open access model has worked in Danville Virginia. Listen to this episode here.

00:15:

Lisa Gonzalez:  Hello, there.  Welcome to the Community Broadband Bits Podcast, brought to you by the Institute for Local Self-Reliance.  This is Lisa Gonzalez.

This is our 22nd episode, and we take you to Danville, Virginia.  Many of you know that Danville is known as a community broadband success story.  Danville has evolved from a fading tobacco and textile town to a vibrant high-tech hub, thanks to the broadband infrastructure.  Christopher talks with Jason Grey, Broadband Network Manager for nDanville, the city's next-generation network.  The two spoke at the Community Fiber Networks Conference in Danville on November 8th and 9th.  Chris and Jason have a few moments to discuss the details of what the network has done for the community.  Here are Chris and Jason.

00:54:

Chris Mitchell:  Jason Grey, thank you so much for joining me for the Community Broadband Bits Podcast.  We're here at the -- at a conference that I think you actually helped set up, right?

01:03:

Jason Grey:  That's correct.

01:03:

Chris:  Why don't you tell us a little bit about this conference and what's going on first?

01:06:

Jason:  Well, it's a regional conference of broadband communities, as organized with the city of Danville, Virginia.  We've been organizing for six months now.  It's their first economic development conference, of a series of conferences.

01:23:

Chris:  Great.  And why do they come to Danville?  What's Danville like?

01:26:

Jason:  The story of Danville piqued their interest.  Not only our fiber optic network -- our open access fiber optic network -- but our story of Danville being a tobacco and textile town that has lost those industries and is now trying to transform into a new industry and new city.

01:47:

Chris:  Great.  We're -- this is my second time to Danville.  It's in southern Virginia, really close to the North Carolina border, toward the center of the state, east-west-wise.  And so, let's talk a little bit about the network.  Danville's got its own municipal utility.  And how did the network start?

02:04:

Jason:  Danville does have its own utility, where -- we're the only utility in Virginia that does electric, water, gas, wastewater, and telecommunications.  But the network got started in 2004.  Servicing our own needs: schools and governments.  Which helped start revenue.  We -- the schools are separate from the government.  So we generate what we call E-rate revenue.  Many of your followers online and on this podcast are probably familiar with E-rate and USAC.  But that helped generate revenue for the network to -- in order to build out to each commercial and, now, residential customers.

02:46:

Chris:  The E-rate -- you have to bid for that constantly, right?  That's not a guarantee.

02:49:

Jason:  That is not a guarantee.  It's an annual process.  We do it every March.  And it's not only with the Danville city schools.  We also -- there's a county that we serve, right outside Danville,  Pittsylvania County, that we also serve.  They have several schools that we connect, that never had fiber until we connected them.  But it's -- again, it is an annual process, a competitive process, with any provider that wants to bid on those contracts.

03:21:

Chris:  You built out to the schools first.  And then you started connecting some of the businesses.  And what happened then?

03:26:

Jason:  2006, we --  For two years -- we built the network in 2004, connect our own buildings and schools.  And for two years, we were up and running.  Everything's fine.  And then, 2006, we said why don't we branch out?  You know, we overbuilt our fiber capacity.  We have extra strands.  Extra capacity.  So we decided to start a small pilot, 10-15 businesses, a variety of businesses, from medical to private schools.  But in 2007, we officially started opening it up for any business in our Danville utility service territory.

04:08:

Chris:  And so, you provide service to the schools, where you're the -- effectively, the ISP, serving the schools.  But that's not how it works with the businesses, right?

04:16:

Jason:  That's correct.  Since we're an open access provider, we bring in, or try to market, service providers to join our network, to offer their own services.  To keep us out of competing with the incumbents, which, in our case, are Verizon and Comcast.  But, you know -- and Verizon and Comcast are also welcome to join our network and utilize our infrastructure.  But it's just an easier business model for us, instead of being a retail provider.

04:49:

Chris:  Can you tell us a little bit about the service provider that's operating on your network presently?

04:52:

Jason:  Gamewood is offering service on our network.  It's Gamewood Technology Group.  You can log onto their website.  Their business and residential services are -- their URL is fiberflexmedia.com .  But they started out as a wireless provider, and have evolved to a full-service provider.  But they are from Danville, and have now branched out into other counties and cities in the south side of Virginia.  But they've been with us from the beginning, and have been on the network ever since the -- since 2007.

05:32:

Chris:  Oh.  You said that you're actively recruiting additional service providers.  And in one of your -- earlier, when you were speaking to the -- all the guests -- all the attendees of the conference, you said that it's difficult to get multiple service providers on a network, early on in the network.  Can you tell us more about that?

05:49:

Jason:  It is very difficult, in an open-access environment, to have multiple providers, when you're only connecting a few hundred customers.  We've passed several -- probably -- a little over a thousand customers, including our residential customers, but we've only connected a few hundred.  But in order to really get the attention, and be attractive to service providers that are not from the area -- not from the Danville area -- we really need to pass at least 3,000, and have a good portion of those customers connected, in order to be attractive to service providers that are not from this area.

06:28:

Chris:  In a conversation earlier, we were talking about the networks that are here, aside from nDanville.

06:36:

Jason:  Um hum.

06:36:

Chris:  Before nDanville.  So, we have Comcast and Verizon.  But neither one of them has really made investment in Danville a priority.  I'm curious if you remember some of the pricing that was common, for, like, a T1, prior to nDanville.

06:52:

Jason:  Ah, T1s were $400-$500.

06:54:

Chris:  A month.

06:54:

Jason:  A month.  Now they're in the neighborhood of $350 to $400.  On our network, you can get a 5-Mbps point-to-point circuit for $250 a month.

07:12:

Chris:  So it's about three times faster at about half the price.

07:15:

Jason:  That's correct.

07:16:

Chris:  Right.  And not only that but it's FAR more reliable, being fiber, right?

07:19:

Jason:  Fiber connections are much more reliable.  They're less susceptible to electrical interference, and storms, than copper connections.

07:28:

Chris:  So, how is this network, and the availability of these much better connections, impacted local businesses, or attracted new businesses?

07:36:

Jason:  Well, it's gives them growth capacity, which they can grow upon as their needs increase.  Banks love it because, instead of having forklift upgrades when they need to do a software upgrade -- you know, whether it's payroll or some kind of application that they use -- we can upgrade them, same day, to a higher-speed connection, rather than waiting for the incumbent to change out cards and possibly add more lines to a facility, to accommodate their needs.

08:16:

Chris:  Right.

08:16:

Jason:  So, it's just a much cleaner connection.  Much more reliable.  And we can grow their connections as they grow.

08:26:

Chris:  What happened with --  Can you tell me the story of the nonprofit, the Cray organization?  I was just -- it was fascinating to see the video.  And we're going to put that video up on our site when I get my hands on it.  Great interview.  Talking about how they came to Danville because of the network.

08:43:

Jason:  Noblis is a nonprofit company, and they house a supercomputer -- a Cray supercomputer -- in Danville.  It's the first supercomputer housed outside of a federal laboratory or a university.

08:57:

Chris:  Can I actually just put in a plug?  The Cray computers come from not far from where I live, in Minnesota.  They're developed right over on the border with Wisconsin.

09:05:

Jason:  How about that!  But they -- it's a requirement.  I mean, the Cray computer would be a standalone without broadband.  They have connections.  They have a point-to-point connection back to their headquarters back in Herndon, Virginia, on the Beltway of Washington, DC.  As well as other connections through different networks, including ** broadband.

09:31:

Chris:  And if understand their map correctly, they -- so they have connection, point-to-point, between their Danville facility and this place that's right on the beltway with DC.  But their Internet connection comes from the Danville branch.  And so the Danville offers -- Danville offers them better connectivity than they can get in DC, then.  Is what I'm guessing.

09:51:

Jason:  Well, the Internet connectivity is via nDanville, but it's through Gamewood.

09:58:

Chris:  Right.  That's what I meant to say, was that -- they didn't go with Verizon,

10:01:

Jason:  Right.

10:01:

Chris:  or whoever's up there in DC.  They connected across the state, to use, and to share, the connection by Gamewood that's enabled by the Danville infrastructure.

10:12:

Jason:  That's correct.

10:12:

Chris:  Right.  It's a fascinating story.  So, for a long time, you focused on businesses.  What have some of the other public benefits been, aside from just new jobs?

10:24:

Jason:  I mean, for our own uses.  The city's uses.  We have fully utilized the network in every way possible.  That we can afford, for one thing.  But, utility-wise.  I mean, we're reading every meter via nDanville.  Even though it comes via a licensed frequency to a tower, that tower has fiber at the base of the tower.  And all that metering traffic comes across our fiber-optic network.  So, if our fiber-optic network was down at any time, we would not be receiving any kind of metering data, which is used for billing.  And outage management, and distribution automation.  I mean, it's part of our smart grid program.  The fiber-optic network is crucial to our utility department.  Not only to electric, but also to water and gas.  I mean, people think smart grid.  But in our case, it's more than just electric.  It also reads water and gas meters as well.

11:24:

Chris:  So, this is a great network.  How much does it cost the taxpayers?

11:28:

Jason:  The nDanville network has never cost the taxpayers a single penny.  The network was funded by a $2.5 million loan from the electric fund, which is a division within Danville Utilities.  But that $2.5 million loan was paid back, with 6% interest, in three years.  And that's about the time we started offering fiber-to-the-business services -- in 2007.  So we paid back the loan.  And then have just used revenue that we've generated every year to expand.  And we will continue that model.  We have never gone out for -- well, we have gone out for stimulus grants, which we were unsuccessful.  We've never gone out for loans.  We can go out for loans, but we just don't want to go back -- go out an pay that interest, and incur that debt.

12:20:

Chris:  And how much do you contribute to the General Fund from the revenues of the telecom operations?

12:25:

Jason:  We -- every year since 2005, I believe -- it may be 2006 -- we've contributed $300,000 towards the General Fund.  And, granted, that's not an extreme -- large amount of money, compared to electric, or water and gas, who contribute several million dollars ...

12:45:

Chris:  It's $1.5 million -- or, no, almost $2 million -- in the community.

12:48:

Jason:  But it's -- yeah, it's -- well -- it's well-spent on the General Fund.  It's money that they can use on other projects.

12:56:

Chris:  So now we have the final phase, which has been started.

13:00:

Jason:  Um hum.

13:00:

Chris:  You're starting to deliver service to residents.  Can you tell us about the pilot project?

13:04:

Jason:  We started deploying fiber in a university community.  Averett University is a large university in Danville.  They have satellite campuses all around Virginia -- Washington, DC; Richmond; Norfolk; Roanoke -- as well as international campuses.  But there's -- the community that surrounds the university in Danville, which is about 1,200 homes, we're going to extend fiber down each and every street, and then extend drops to the houses as they sign up for service.  So far, we've passed -- I think the last numbers I saw were about 800 homes of those 1,200.  So, we've passed 800 homes out of 1,200.  And we plan to pass the other 400 by spring of 2013.

13:53:

Chris:  And that's all been paid for out of operating net revenues.

13:57:

Jason:  Revenue from the schools.  Revenue from business connections.  No Danville taxpayer money.  Or utility electric money.

14:05:

Chris:  And do you have a sense of when you would be able to expand the pilot project?  Is that on the horizon?

14:12:

Jason:  We have already submitted our next neighborhood, which is another neighborhood across town, which is about 250 homes, which we'll start July of 2013.  That's in next year's budget, and will have to be approved, of course, by City Council, as -- that will be part of our 2014 budget.  But I don't see any problems there.  But we'll keep the same business plan, of about 1,000-1,200 homes each year.  As revenue grows, that number will grow as well.

14:50:

Chris:  Is there anything else that we need to know about Danville?

14:52:

Jason:  Well, we ARE a fiber-connected community.  And we will hopefully get fiber connected to every home within 10-12 years.  Hopefully sooner, depending on revenue.

15:04:

Chris:  Excellent.  Thank you so much for joining us on the show.

15:07:

Jason:  Thank you for having me.

15:09:

Lisa:  That was Christopher talking with Jason Grey of nDanville.  We provide a link to the nDanville website on muninetworks.org , so you can learn more about the network.  We also encourage you to visit muninetworks.org , where we cover Danville extensively.  Follow the "Danville" tag for stories dating all the way back to 2009.  If you have any questions or comments, please send us a note.  E-mail us at podcast@muninetworks.org .  Our handle on Twitter is @communitynets .  This show was released on November 20th, 2012.  Thanks to the mojo monkeys for their music, licensed using Creative Commons.  The song is called, "Bodacious."