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Transcript: Community Broadband Bits Episode 134

| Written by Christopher | No Comments | Updated on Jan 24, 2015 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/transcript-community-broadband-bits-episode-134/

Thanks to Jeff Hoel for providing the transcript for Episode 134 of the Community Broadband Bits podcast with Elliot Noss, CEO of Tucows and head of Ting. Listen to this episode here.

00:08:

Elliot Noss: You know, I think that fiber infrastructure is the most important economic asset that any town, city, or country could have. And, you know, I think that there’s all kinds of ways — and we haven’t even started to scratch the surface — of models where you can have municipal or government ownership in partnership with companies.

00:33:

Lisa Gonzalez: Hello. This is the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. I’m Lisa Gonzalez.

Muninetworks.org readers know that Tucows, Inc., parent to mobile’s cell service and Internet provider Ting, has recently announced it will begin offering Internet service in Charlottesville, Virginia, and Westminster, Maryland. If you’ve never heard of Ting, it’s been praised for its excellent customer service. Yes, that’s right, a communications company that actually provides a kind of service customers deserve. Tucows is acquiring fiber assets from an existing private entity in Charlottesville and partnering with the city of Westminster as it deploys its municipal fiber infrastructure. Tucows has announced that part of its strategy to expand as an ISP is to seek out communities that have publicly-owned fiber assets in place and deliver services via municipal fiber infrastructure. In this interview, Chris talks with Elliot Noss, CEO of Tucows, about this exciting model, and how they intend to apply it to gigabit connectivity. Partnerships between the public and private sector are one way to increase choice and improve services.

The Community Broadband Bits Podcast comes to you every week with no advertising. Unfortunately, they’re not free to produce. Please consider contributing to our work by visiting ilsr.org and clicking on the orange “donate” button.

Now, here’s Chris, speaking with Elliot Noss from Tucows.

02:00:

Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I’m Chris Mitchell. Today, I’m speaking with Elliot Noss, the CEO of Tucows. Welcome to the show.

02:11:

Elliot Noss: Thanks, Chris. Thanks for having me.

02:13:

Chris: Elliot, we’ve been a big fan of a lot of your work. We register all of our domains through Hover.com, which you run. And both Lisa and I are broadband experts, have been using your wireless service, now, for a while for our cell phones. But I didn’t have an excuse to bring you on until you bought an ISP in Charlottesville, Virginia. So, we’re going to talk a lot about the sort of things you’re involved with. But let’s start with just asking, you know, what is your background? How did you come to be involved in all these things?

02:42:

Elliot: Well, Tucows has a long history, Chris, as you know, most of. And, you know, I’ve been doing the same job now for 18 years. But how I got into it — you know, my roots, and the roots of a lot of the Tucows employees are in the competitive ISP space, in Toronto, you know, in the mid- to late-nineties. So, you know, we’re ISP folks at heart, and if you track through the history of Tucows, you know that the software libraries. We’re partnered with ISPs around the world — over a hundred countries, over a thousand mirrors. Our biggest business still is our OpenSRS wholesale domain registration service, which, again, is partnered with ISPs and web-hosting companies all over the world. There, it’s 120 countries, and 13,000+ partners. So, our roots have always been around and in the service provider business. You know, in addition, both the company and me personally have been in involved in the — you know, sometimes I call it the seamy underbelly of Internet. You know, dealing with the policy side, primarily through ICANN, which is the regulator of domain names. And, you know — as you know, because where you and I met was, you know, in some of the Open Internet circles. And so, you know, we come by a lot of this stuff honestly.

04:15:

Chris: Right. That’s one of the reasons I wanted to have you on this show. I think regular listeners will know that we don’t often have on private companies. But this is a good timing because you and I will both be in New York City at the beginning of March for a Freedom To Connect, which you’re one of the sponsors of, so I certainly want to help you — or, want to thank you for that. And you’ll also be speaking there. So it would be a good time for people, if they’re interested, to show up and to get a sense of what some of this Open Internet stuff is all about.

04:44:

Elliot: Yup. And, you know, I joke, there won’t be a lot of our shareholders. We’re a public company. There won’t be a lot of our shareholders listening to the show. But, you know, we’re lucky enough that, you know, we’ve been able to successfully align our business interests with Open Internet principles, and with doing a lot of, you know, sort of good things for customers. And, you know, for the people who work at Tucows, in any of the business units — I mean, that’s one of the great things about it, is, we’ve really just sort of chosen to take a very customer-friendly and Internet-friendly path.

05:23:

Chris: One of the words that I’ve used since using Ting, your wireless service, is MVNO.

05:30:

Elliot: Mobile Virtual Network Operator.

05:32:

Chris: Let’s talk a little bit about how you got involved with actually providing telecom services on the wireless networks.

05:40:

Elliot: We have seen and felt the pain in telecom, both mobile and fixed, for many years. And we were lucky enough to be able to take a lot of the systems that we developed in our wholesale domain registration business and just simply apply them to a different problem. So we were able to take a lot of our back office — all of the billing and provisioning, as well as the customer service processes and principles that we developed on the domain registration side and bring them to mobile. You know, we found a good initial partner in Sprint. We went through, you know, a process where we were able to see that we could find economics that worked for both us and customers. And we really offer a very different kind of mobile service that, you know, saved people money, and probably, more importantly, you know, provides a great customer experience. And, you know, I mean, essentially, Sprint sells us network at a wholesale level. You know, if all Ting customers, as far as Sprint is concerned, work off a common bucket of minutes, messages, and megs, and, you know, we just take all of that data and parse it underneath, and bill and rate it separately. It’s also worth noting that in a couple weeks, we’re launching with a GSM partner as well, so we’ll essentially have two networks at that point that our customers can choose from.

07:17:

Chris: And just to wrap up with the Ting wireless, I’ve often tweeted that I’ve — you know, I’ve felt really positively toward Ting. I’ve had a couple of problems with a phone. And it wasn’t your fault, but your customer service people were very quick and very easy to deal with. And, as I understand it, you know, you haven’t — you didn’t note it, but you’ve just won an award, I think, or you’ve had a distinction, at any rate. What was that?

07:42:

Elliot: Yeah. Consumer Reports, which, you know, we think sort of does the — let me call it, the cleanest job of rating things like customer service and carriers, named us the number one mobile service in the US. And we got their highest rating ever. And, you know, what was especially rewarding about that was that in the same survey, or same set of results, Sprint was actually among the very lowest-ranked. And so, you know, what that demonstrated is, you’re working off of the same network, and that customer service experience really can be a unique piece. You know, I think — we’re big proponents of network as dumb pipe. But there’s so much that can be done on top of that dumb pipe to differentiate services.

08:38:

Chris: And that’s really why I wanted to have you on. Because now you’re taking yet all the lessons you’ve learned from wireless, which you had previously learned in your customer service experience, and you’re going to start delivering gigabit to people. Maybe we can just start with first announcement, which was the company that you purchased in Charlottesville.

08:59:

Elliot: Sure. So, we bought a small ISP in Charlottesville, Virginia, called BRI — Blue Ridge Internet. They have about 35 miles of fiber network right in Charlottesville proper. And it was a great combination. You know, relatively, is a very small company. It’s a great place for us to get our start in gigabit Internet. They only offer fiber access. They are certainly NOT offering a gig today. But they’ve got a lot of experience building fiber inside of a city. And they also have a very good reputation around customers. You know, fiber is somewhat capital-intensive. And, you know, business is quite process-intensive. So it’s this great marriage now, where we’re going to be able to bring a lot of our back office and customer service processes to them, and allow the entrepreneurs — the two entrepreneurs at BRI, who have done a great job over the years — to really focus on what they love doing most, which is, you know, building networks and serving people.

10:10:

Chris: One of the things that people often associate with me is a passion for public ownership. Because I’m always afraid that a private company, such as Ting — you know, you get ill, something happens, you decide to sell the company. Who knows how it’s operated …

10:24:

Elliot: Yes.

10:24:

Chris: … in the future? And so, one of the things that I was really thrilled about, as you were thinking about entering this space, is your willingness to operate on fiber that’s owned by a city. And …

10:36:

Elliot: Yeah.

10:36:

Chris: … And I think that’s important, because I think city-owned fiber has tremendous potential, but they really need a trusted partner — or many trusted partners — to deliver services.

10:47:

Elliot: Yeah. You know, there’s a couple pieces I want to tease out there. One is something you’ve heard me say, in small groups, for a few years. You know, things that cities really are best at is around providing access to infrastructure. So that’s everything from easements to rights-of-way to fast turn-arounds around approval. You know, those are things that are uniquely skill sets of the city. I’m a very big fan of great muni fiber networks like Chattanooga and like Lafayette. You know, I do think that they are somewhat the exception, where you really need an individual who is driving that exercise. You know, I’m not a — You know, I’m neither a free market zealot nor a, you know, sort of far on the left in terms of community ownership. I do think, at a practical level, in the telecom environment, in the US — and, by the way, everything I about the US will pretty much apply to Canada in the same way — where I’m from. You know, it’s that in the current context, you know, municipal fiber makes a lot of sense.

You know, the best story I like to tell there is — I was meeting with the mayor of a Canadian town or city — you know, about 100, 150 thousand people — and we were talking about — you know, just very loosely, it was nothing formal — but talking about doing a fiber trial. And I was encouraging him, letting him know — you know, we were in their city for other reasons — and letting him know that, you know, we’d love to do a trial. And, you know, talking about who would provide the capital. And, you know, what I said is that, mayor, if I were you, boy, I wouldn’t let me own the network. But if you want to LET me own the network, then I certainly will. And I think that that sort of best grounds it. So, you know, I really — you know, boy, if I was the one who was making the decisions on behalf of a city, you know, I think that fiber infrastructure is the most important economic asset that any town, city, or country could have. And, you know, I think that there’s all kinds of ways — and we haven’t even started to scratch the surface — of models where you can have municipal or government ownership in partnership with companies.

You know, I also deeply believe that — and it’s unlikely, or it will be the exception — that cities, counties, states will be better at operating a network than private interests. And so it’s really about finding a way to combine what each group can be best at.

13:32:

Chris: No, and I appreciate that distinction. Although I have to note that in the empirical record right now, if you had to plop me down in the average municipal system, versus the average privately-owned system, which, admittedly, really skews it to Comcast and Time Warner Cable, that the actual operation, the customer service, the value — all of that — would be much higher in the municipal cities, where they own and operate it. But I think that that’s because the cities that have done it are the ones that really have that tradition of doing it well. And they’re able to go beyond what cities are traditionally good at. So I wouldn’t — you know, I don’t think we’re in too much of disagreement on that, …

14:12:

Elliot: That’s right.

14:12:

Chris: … but I think that the key to really expanding really great infrastructure access to Internet — and high-quality Internet — is going to be finding ways that cities can own the infrastructure for the long term, and have a company like yours that will operate on it, whether that’s alone or whether that’s in competition with other ISPs such as yourself. So, what I guess I’m curious about is, you know, if I’m a city, and I’m thinking about building a fiber optic network, what do I do to make sure I’m attractive to you, and that I’m building it in a way that would allow you to work with me?

14:48:

Elliot: I think that’s the right question. You know, I’m a big believer that this is about tactics, not strategy. So, you know, it’s always tricky, if we want to have a model for the future, to look at, you know, how terrible Comcast is. Because on the other side, you get the, you know, what a disaster UTOPIA has been, etc. And I think that all of that is about tactics, not strategy.

So, you know, what can a city or a town do? And I think the first, most important thing is to really recognize that — the sort of the what do they do well — how can they help with pole or conduit rights? How can they help with fast processing of approvals? You know, one of the frustrations to me, as I’ve watched all of the Open Internet and muni fiber discussions over the last two years, is seeing what Google Fiber got from Kansas City being described as a subsidy. You know, it was a — I think that what they asked for and got from Kansas City was efficient processes. And to have that called a subsidy is just to institutionalize bad processes, in the wrong way.

16:04:

Chris: Well, let me just briefly touch on that, because I think that, because we’re lumping together other multiple issues, I think that may make sense for some of them, and maybe not for all of them. I do think there’s a question of whether you’re starting to employ more people to do inspections in the right-of-way than you might otherwise have had — that’s a cost that has to be paid by someone. And the question, I think, is whether that should be subsidized by the general tax base or by whoever’s building in the rights-of-way. So I think, you know, there’s — a little bit more complicated than you just suggested.

16:39:

Elliot: Well, that’s good. So, I would describe that — I mean, you talked about more. I really think that, often, when you go underneath it, you’re actually talking about less. There are often processes and procedures that are in place that have been around for years and years. You know, governments are notorious for being slow to reform their business processes. And I could, you know, bore you with dozens and dozens of examples ….

17:15:

Chris: I’ve tried to pull permits. I’m not going to deny that.

17:17:

Elliot: Yeah. Process inefficiencies. And, really, it’s recognizing that fiber infrastructure, it has such public benefit — that’s important point number one.

Important point number two — you know, if I’m a city administrator, what a great forcing mechanism for me to clean up my procedures and processes. You know, to take an incredibly populous issue — like municipal fiber, like fast Internet — you know, to leverage the — just the distaste and the dissatisfaction that people have today with their fixed Internet providers, with their pay-TV providers — um, you know, with telecom in general — to leverage that to improve the efficiencs and operations of a city, and all with the goal and benefit of creating great public infrastructure — or public-private infrastructure — you know, I think that’s just golden. And I think that’s an opportunity that, as a city administrator, I just wouldn’t miss.

18:25:

Chris: That make sense. Those are some really good points, I think, for looking at sort of that city as permitter and what not. I’m wondering if a city — for instance, let’s look at the city of Westminster, which I think …

18:39:

Elliot: Sure.

18:39:

Chris: … is worth discussing, because it sounds like you’re going to be building a fiber optic network in partnership with them ….

18:45:

Elliot: Well, I want to just put a finer point on that. They’ll be building the network. We’ll be operating it.

18:52:

Chris: So, that’s actually perfect. Because that’s where I wanted to be going. And to say that, you know, when Westminster is building this network — you know, if they were building fiber-to-the-home themselves, they might be doing a specific layout, and figuring out what technologies they were going to use. You know, how does a city go about doing this when they’re going to be partnering with someone like you that’s going to be operating it?

19:14:

Elliot: So, Westminster is going to be an experiment. You know, we really can’t find a spot-on model. So we’ll be — in the best sense of the word — making it up as we go along. You know, there’s going to be a network design process. You know, they actually have most of that done. There will be, you know, a first area of trial, and a second area of trial. We’ll be lighting up the network. We’re just going to work very closely together. You know, we worked to come up with a creative set of economics where we’re picking up a reasonable amount of the risk. You know, they’re picking up the capital, but we’re picking up a reasonable amount of the operating risk. We’re trying to come up with economics that work for everyone. It’s a great place for both of us to experiment. And I think important — on the one side, for cities and towns, and on the other side, for businesses — to find models that work here. So I think that, you know, we’re going into it, breaking new ground, you know, really, in the sort of relationship sense. And, you know, we’ll be learning as we go along. We don’t expect to be perfect coming out of the gate, but we, you know, hope to be close enough to make it work for everyone. And, probably most importantly, to create a bit of a model that can be re-created in numerous other places.

20:42:

Chris: Let me wrap up by asking you, what sort of services do you want to offer? Are you going to be trying to negotiate with ESPN? Or are you going to be just giving me a gig?

20:51:

Elliot: So, we are certainly going to be offering a symmetrical gig at sub-a-hundred dollars — you know, the — in what I call it — the classic new gigabit sense. And we expect to be able to do that with a fantastic sort of online experience, and all of the great customer service that we’ve able to provide at both Ting Mobile and Hover. So, you know, that stuff is easy. We will be offering a pay-TV product. That’ll happen some time in 2015. I think it will be — the best thing I can say about it now, because it’s early days there — you know, we’ve done a lot of the work, but there’s a lot that’s NOT finalized there — is, it will be a nice synthesis of OTT, OTA, and pay-TV. So that’s over-the-top, over-the-air, and pay-TV. You know, we think that, while you do see a definite decline in pay-TV, and growth in cord-cutting, what is ALSO true is, there’s a lot of great content being produced.

You know, our roots, Chris, are in software downloads. So, you know, when you think about TV as really either streams or downloads, it takes on a very different flavor.

22:11:

Chris: Elliot, you’re one of the most technical people I have known, in terms of really quickly figuring out what’s important to know and what’s not, on these different things. Dish has just announced Sling TV. For those who aren’t familiar, Sling is providing a number of cable channels over the Internet. So, I’m a Comcast subscriber, but with my Comcast Internet, I could be watching ESPN, with my subscription to Sling, through Dish. Which is interesting. Is this a game-changer?

22:41:

Elliot: Ah, we really like it, actually. And — is it a game-changer? You know, I think that it’s an important step along the road, in a lot of respects. You know, this is not a market that will be subject to binary — you know, kind of yes-or-no forks in the road. There’s going to be a long process where pay-TV will evolve. And I do think that this is an important piece on that road. So, you know, we think about it as — you know, the reason we feel we have to offer a pay-TV service is because it simply increases the take rate on gigabit fiber, which is the most important thing to us.

So, you know, there are some people who just — you know, I want my TV to stay the same, but I’d like to improve my Internet. We’ve got to be able to do that for them, in a way where they can get rid of Comcast of CenturyLink or whoever it is on the other side of the pipe. So, we do need to offer something that’s — you know, that’s just sort of a — that’s sort of an equivalent there. And, by the way, there’s no reason to say that can’t be through reselling something, like Dish. Now, what Sling does — as well as a couple of other pieces — is, it increases the — you know, sort of around the margins, the number of people who will just say, well, that’s just enough for me. You know, that and OTT is enough for me. That and OTA and OTT is enough for me. So, we think it moves the ball down the field. But, you know, there is not black-and-white here. There’s going to be a long process. There’s still going to be the majority — the significant majority of the people, you know, who like their existing TV just fine but would like to just simply pay less and be treated better. That does bring in a bunch of opportunities. But what it also still leaves is that — let me call it the — you know, the family geek’s technical challenge of getting that from the Internet to the TV set.

24:52:

Chris: Right. Yeah. My TV is not very — does not make it easy. The BlueRay player makes it a little easier to do stuff. But the TV is a miserable to try and use Internet apps.

25:04:

Elliot: You know, and, Chris, you see very simple things, like — you know, so, how would — for a lot of people, what that will mean is using Apple’s AirPlay.

25:11:

Chris: Right.

25:11:

Elliot: Well, you know, that can have a problem if somebody’s using the microwave. Or if, you know, if an adjoining house is doing something with a garage door opener. So, there’s a lot of variations. And it’s why I say that this is all heterogeneous, and it’s all just steps along the road.

25:27:

Chris: Is there anything else that you want to make sure we touch on as we end the interview?

25:31:

Elliot: Well, I think that, you know, one thing that I would want to put out is, we’re — you know, we’ve got these two deals that we’re going to be working on. That’s really going to be the bulk of our work in 2015. Because we want to get really good at laying fiber, at having all of the business processes in place. You know, in 2016, we’ll start to come at additional markets much harder than we will — you know, ’15 is almost — in some sense, is a beta year for us, for this.

26:00:

Chris: And so, if people want to try and bend your ear on it, they can show up at Freedom To Connect, in New York City, on March 2nd and 3rd.

26:08:

Elliot: Absolutely. That would be great.

26:10:

Chris: Well, thank you for coming on the show.

26:12:

Elliot: Thanks for having me, Chris. That was great.

26:14:

Lisa: Send us your ideas for the show. E-mail us at podcast@muninetworks.org . Follow us on Twitter. Our handle is @communitynets . Don’t forget to check out our stories about Ting’s upcoming investment and Westminster’s deployment on muninetworks.org .

And please take a few moments to donate, in any amount, to ilsr.org to help us continue this valuable service.

We want to thank Persson for the song “Blues Walk,” licensed through Creative Commons. And thank you for listening. Have a great day.

26:45: