Pete Pizzutillo: Hello and welcome to another episode of The Broadband Bunch. Today we have the opportunity to speak with Dave Spencer, the CEO of NoaNet. He's joined by Claire Ward, marketing and communications manager. They tell us more about the origins of NoaNet in the early days of open access networks. We spent some time talking about the current state of open access networks, the regulations, technology and consumer expectations that are driving wholesalers and retailers to provide broadband to the state of Washington.
Before we dig in a little bit about open access and NoaNet and what your perspectives on what's going on in the market, it would be great just to give our listeners a background understanding of each of your personal journeys to how you ended up with NoaNet today. So Dave, I don't know if you want to start. I think you've been there the longest.
Dave Spencer: I was part of the founding group back in 2000. I was doing consulting services to the mid-Columbia public utility districts and they had a vision to bridge the digital divide in their communities. They were being bypassed and I helped on the original business plan and then came over to NoaNet. And founded it back in 2000.
Claire Ward: My story is quite a bit shorter than Dave's. I joined about five years ago and I'm actually a telecom transplant. I have my background in mental health, which we kind of joke, that's why they hired me to kind of bring some sense to it. But no, I actually get to work on the community outreach team, which is wonderful. And we help educate communities on the ways that telecom can help them meet their goals for economic development and social goals and all kinds of things. It's a wonderful group to be a part of.
Dave Spencer: NoaNet back in 2000 was created to bring broadband to communities that were being bypassed by the dot com boom. If you recall back and late 90s and early 2000s, the internet was booming and businesses were forming and this idea of electronic commerce was just being launched. And back then the public utility districts, which are non-profit locally controlled utility companies realize that their communities are getting bypassed. And so they banded together under one leader, Greg Marnie, the original CEO, and created NoaNet to help bridge that digital divide and bring broadband to these rural areas.
Claire Ward: NoaNet's mission has always been to bring broadband to the rural areas. It's been a bit of a moving target because the definition of broadband keeps changing. The technologies that are available keep changing. So that's something that NoaNet has really strived to stay on the front end of, to make sure that we're not just bringing the definition of broadband 10 years ago to these rural areas. We want to make sure that the rural areas have access to the same technologies and bandwidth that the urban areas have access to.
Dave Spencer: There was a real concern back then that local talent and the local economies would die on the vine, if you will, without broadband and what that represented. And there was a strong desire on the part of these communities to bring the best in healthcare, education, public safety and local economic development to these communities that looking into the future, we're going to be suffering as a result. And back then of course it was extremely real for these communities. And fast forward in today still is in a lot of ways.
Pete Pizzutillo: That's interesting because we talk to folks today, economic development professionals in different municipalities and there's still in some areas that disconnect between how broadband could support not just the technology maturity of the region, but all the underlying industries that you mentioned. From healthcare, to education, to manufacturing, to telecommuting. So what was it in the NoaNet's or that community's DNA that you think helped them recognize that early versus the majority of the municipalities that are out there are still just starting to come to that realization today?
Dave Spencer: Back then there were a utility companies that were forward looking in terms of broadband for their own utility operations and many of these real time controls, well what they call SCADA relay work for electrical distribution systems. So there was an inherent need for advancement in technology back in 2000.And then with the challenging business plans of the private sector coming into these areas that there was talk about, well there's not really the demand that. It's hard to justify the return on capital and with utility companies already there with capital available could that be a way to leverage improvements to the utilities system to then serve that community with that excess capacity?
Pete Pizzutillo: So the utilities already looking at fiber to help them improve the efficiencies and bring some capabilities there. But then also marrying that up with the private concerns to figure out more holistically how everybody can benefit more greatly from this investment, we're still seeing that today. It's just taking some folks a while to get there. But there's a lot of models that you guys could have employed to service those constituents, right. I mean, so in your state is a little bit different. There's a couple of states where they have the same kind of legislative requirements. Has that been true since 2000 that you cannot provide to retail, not can be a retail provider or is that something that's happened? What was the choice that the way NoaNet was formed, was it a consequence of the legal regulations or was that a business operation model that you guys thought was the proper way to go?
Dave Spencer: Well, back when we were formed, there were no laws restricting PDs from providing retail broadband and there were ... As the momentum grew to have PDs developing local broadband systems, there was push back from the private sector on the utilities get involved in that. They hadn't previously had authority to do that, but they had taken the excess capacity model. It seemed logical that they had helped these communities help themselves. And as a result Washington enacted a law that expressly prohibited public utility districts from providing retail telecommunications and that although they could build infrastructure. They had to offer it, if you will, to the carriers and the incumbents in order to serve the end user and provide the billing services. And hopefully and potentially their own capitalization of add on networks.